Nowadays the insurance of artworks is a central matter in the art buying process. Yet many collectors are still reluctant to insure their works of art: it is estimated that only 15 or 20% of artworks and artifacts are currently insured in France. There are many misconceptions about insurance, including the idea that premiums would be very high. However, it is possible to find an insurance policy that suits everyone.
Why artworks should be insured ?
Works of art are exposed to the same dangers as the rest of your property (theft, fire, water damage, accidental damage …). Work purchased in a gallery or auction house is, in most cases, intended to fit into the daily decor of the collector: hanging on the walls of their home, the work is exposed to small domestic hazards, water damage and general mishaps.
Twenty years ago theft were the main concern regarding the safekeeping of artworks, today the situation has changed. This is due to the increase of private security measures, as well as the strengthening of the control of fraudulent trafficking of artworks. Nowadays, the real threat to your paintings are the risks found in everyday life. 40% of the damages covered by the specialized company Hiscox are accidental, and nearly 20% occur as a result of water damage. Considering the value of some works, it is therefore essential to insure them.
Classic multi-risk insurance or specialized insurance?
The protection of artworks and precious objects does not seem to be accessible to everyone. In fact, the annual cost of these types of contract has decreased significantly in recent years. It all depends, of course, on the value of your collection; but according to our information, a specialist insurer like Hiscox offers a minimum premium of 600 € per year to insure art collections.
If your collection includes works below 5000 €, you still have some time, but you can already discuss the coverage of your home insurance with your usual insurer.
If your collection is growing and especially if you plan to invest in art with a real desire to build a heritage, it’s time to look for a specialized art insurer. Specialized insurance starts to be interesting when the estimated amount of your collection exceeds 50.000 €.
Generally the amount of premiums corresponds approximately to 0.5% of the value of assets to be insured, to which are added the expertise costs (fixed price or percentage of the value of the estimated good). Some specialized insurances also require the implementation of a suitable security system: security door, alarm system etc…
Options: “agreed value” or “declared value”?
There are usually two types of contracts, depending on which intermediary you choose to estimate your artworks’ value.
– The contract is “agreed value” when the total value of your works is determined at the time of the subscription of the contract, after the evaluation of an expert. This avoids possible future disputes with your insurer, and also prevents the value of your collection from being devalued. The premium of your insurance is calculated on this value.
– The contract is “declared value” when there is no prior agreement with the insurance on the total value of your collection. The value of an insured work of art in declared value is determined theoretically during the subscription of your contract. Providing a list and a precise estimation of each work, the insurance will be able to determine the amount of the premium to pay. In case of deterioration or damage, it is your responsibility to provide all the proof establishing the value of the insured work.
Thus, for a so-called “classic” collection, the evolution of the value is marginal and one can envisage an insurance on the basis of an agreed value. However, for a contemporary art collection, subject to speculation, we can anticipate a strong change in value over time, which justifies choosing a declared value option, which will reassess the value of your works every 3 to 5 years.
In case of damages, your contract must include:
– The cost of the restoration of the artwork
– Reparation by an expert and all expenses related to the restoration (transport, customs …)
– When compensation is possible, compensation for the depreciation of the work
– Replacement of a work with the equivalent value and equivalent quality
– Compensation of up to 100% of the insured value of the work
At Singulart, we always have in mind collectors’ doubts when we improve our site and in the way we address our customers. Do not hesitate to consult our customer service team who will be happy to answer all your questions regarding the insurance of artworks.
“Fine Art by Hiscox”: an insurance work of art thought for each collection.
This insurance contract is intended for both private collectors and collections of companies, with an artistic heritage of more than 500 000 €.