IMPROVING YOUR APPRAISALS

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The simplest thing you can do to make sure you aren’t underinsured is to have routine appraisals. Every five years is often enough for those collectibles whose market does not change quickly. But for modern and contemporary art, whose valuations have been climbing, you should plan on appraisals at least every three years or sooner if events, like the Bacon sales, occur that could affect your pieces. Dupplin says there are services that will alert you when something happens that might change the your collection’s value, so that you can get a reappraisal sooner than planned or investigate additional insurance.

Remember that valuations also can go down, leaving you over-insured. At the same auction in which the Bacon painting sold, several pieces fetched less than their estimates. There’s no point in paying for $50 million in insurance when your art is only worth $30 million.

FINDING THE MOST VALUE

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“The insurance market is definitely profiting from the increase in art prices,” notes Carl Schweitzer, the head of UBS Art Banking in Basel, Switzerland, which advises clients on issues related to their collections, including insurance. “When they redo their valuations, they collect more premiums.” When you consider that fine-art insurance is a high-end product to begin with, you can see that it’s important to ensure you’re getting the most value you can for your insurance dollars.

One way to get more out of your premium dollars, says Jim Kane, president of insurance broker HUB International in Chicago, is to use the services insurers often offer for free alongside their policies. “You can get a lot of advice on things like loss control, and it’s something that customers don’t use often enough,” he says. He urges clients to seek their insurer’s input on security systems, proper lighting and climate control systems, or to ask for help cataloguing a collection or creating a professional-quality digital archive of it.

SHOPPING AROUND

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Another way to get good value is to find a broker you feel comfortable with, one who has a great deal of experience buying insurance for your type of collection. “This is a profitable line of business for insurers—they all like this market—so there is more movement and flexibility in this area than in other types of insurance,” Kane says.

A good broker can work with insurers to tailor a policy to your needs and concerns. He might even draft a policy for you and ask several insurers to bid on it so you can take the best offer. “It’s like flying first-class, where you get the big cushy seats because you pay more,” Kane says. “You are a valuable client to the insurers, so they’ll do extra things that are beneficial to you.” In an expensive and fast-moving market, it’s worth letting them.

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Eileen Gunn is the author of Your Career Is An Extreme Sport. She writes about the personal side of business for Worth, The Wall Street Journal and others.

FOR MORE INFORMATION

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►AIG Private Client Group
collections.pcg@aig.com
www.aigpcg.com

►AXA Art Insurance
www.axa-art.com

►Chubb Group of Insurance Companies
Warren, N.J.
908.903.2000
www.chubb.com

►Fireman’s Fund Insurance Co.
www.firemansfund.com/art

►Hiscox
011.44.87.0084.3777
www.hiscox.com

►HUB International
800.798.5776
www.hubinternational.com

►UBS Art Banking
011.41.8.48.84.80.54
www.ubs.com