Why is it better to buy Insurance specifically designed for Fine Art?

Basis of Valuation

Fine Art is unlike other Property Risks – the market can move very fast, and without warning, whilst the world’s Property markets tend move at a more measured, predictable pace.

It is therefore critical for Art collectors to insure their Art at Agreed Values, being values that are both acceptable to Insurers and the Insured, and in line with current market trends. You do not need to be a Fine Art scholar to know that the value of a Picasso bought in 1960 will have increased significantly over the 60 years to 2020. We advise our clients to revisit the Agreed Values for Insurance of their collections every three to five years, so that their Insurance remains appropriate for the monetary values of their collections.

Property Insurance Policies are more typically arranged with a general “Limit” given for Fine Art, sometimes with individual Limits given per artwork – with no regard for each Insured artwork’s true value.

Excesses / Deductibles

Specific Private Fine Art Insurance Policies issued in London tend to be offered with Nil Deductible (unless a client’s Claims History is chequered), whereas Property Insurance programmes usually include a high Deductible – as the Fine Art is included without any specific consideration given to it.

Artworks that are not entirely destroyed can often be restored to a condition which, to most eyes, would appear perfect. But this process – in many cases – would not cost as much as a large Property Programme’s Deductible. The cost of restoration would therefore most likely fall upon the Insured.

Furthermore, without an Insurer and a Loss Adjuster involved, it would be much harder to accurately calculate – and claim for – depreciation on any damaged artwork.

Underwriters who understand the Risks

This is very important, as it is with all classes of Insurance. A knowledgeable Fine Art Insurance can advise, as well as insure, and will certainly be more helpful and understanding in the event of a Claim than an Underwriter operating outside their area of expertise. Property Insurers may not understand Fine Art as a Risk category – specifically the physical and moral perils particularly threatening to it – and may not be aware of the extent of cover normally given by Fine Art Insurers.

Cheaper

Finally, and perhaps most importantly to many of our clients, pure Fine Art Insurance is often more competitively priced than the “Fine Art” Insurance given as part of a broader programme of Insurances. And when one considers that – as explained above – the terms are usually also more favourable, it makes absolute sense to insure the Fine Art separately.