Homeowners Insurance May Need a Boost To Cover Fine Art
Updated: Feb 8
Home insurance policies typically provide limited coverage for “art, collectibles and antiques”
If you are an art collector or simply someone who cherishes a single piece of work, you want protection for its value and the ability to restore it if it’s damaged. Homeowners insurance policies typically provide limited coverage for “art, collectibles and antiques” – perhaps a maximum of $2,500 – which won’t adequately protect the majority of serious collections or even one noteworthy piece.
Not all art is considered "fine art" for insurance purposes
While many people have art collections of some type, not all expensive artworks – whether they are paintings, sculptures, glass, textiles or other items – are defined as “fine art.” To delineate for insurance purposes, fine art is different from collectibles or jewelry, both of which can also be quite expensive. Fine art generally encompasses investment-type, one-of-a-kind works that may also have some historical or artistic significance.
If in doubt, your insurance professional can help you determine whether your art is “fine” and guide you to the proper insurance policies and coverage amounts.
There are two basic fine-art policies that can be added to your homeowners insurance, each offering protection for the specific work mentioned:
Title insurance: This protects you against a defective title – meaning your fine art purchase isn’t what you expected or your ownership or title is questioned. Although scenarios of theft or fraud may feel like movie intrigue, it’s important to realize how easy it is to create counterfeits or steal fine art compared to other high-value assets. Following a theft, any buyer in the chain of ownership going forward – even someone who made what was considered a “legitimate” purchase – can lose title to the piece, even if it is decades after the original theft.
Property insurance: This provides protection against theft or damage of your fine-art piece. You will want to discuss the specific situations that are included, such as loss or damage due to fire, natural disasters, and accidents at home or during transit. Typically, wear and tear, deterioration or damage due to insects, vermin, war or nuclear hazard are excluded. If you loan your piece out for exhibits or it is displayed anywhere outside your own home or location specified in the policy, this will require separate coverage.
Protecting the artwork’s true value
Before finalizing coverage amounts, you’ll be required to document your ownership and secure an appraisal. You will most likely be asked for purchase receipts and photographs of the work as well. All this documentation is in your best interest and provides the records necessary to support a future claim.
You will be asked if you want a policy that covers both replacement (if the artwork is stolen or completely destroyed) and restoration (if it suffers partial, repairable damage). Of course, when discussing fine art, replacement isn’t necessarily possible, but the idea is to provide a reimbursement amount that would allow you to purchase a new piece of art that is of like kind and quality.
The appraisal of your art will support the eventual selection of an acceptable coverage amount. You can choose reimbursement based on “original cost,” which is the appraised value at the start of your policy, but that does not allow for any increase in the artwork’s value. Therefore, it is usually recommended to select “replacement value,” which allows for appreciation above and beyond the initial appraisal. Whichever option you choose, it is important to have your artwork reappraised on a regular schedule to make sure your insurance keeps pace.
Insurance providers who specialize in fine art often offer additional services you may want to consider. Some have underwriters and claims personnel with fine art expertise, which can simplify the documentation and claims process. Others provide loss prevention services, including a safety evaluation of your artwork’s display space or evacuation and storage of fine art during natural disasters, such as hurricanes or wildfires.
Whatever insurance choices you ultimately make, your policy details should be as unique as the art they protect. You’ve already invested significant financial and emotional resources into your art. That’s why choosing the right insurance protection is so important. It will allow you to spend less time worrying and more time enjoying your collection, whether it’s one special piece or many.
Contact V.F. McNeil Insurance today with any question you have. Our insurance professionals are always happy to help.