Fine art insurance – what do you need to know?

From a Picasso that’s travelling across the world for an exhibition to a Pollock lent to a gallery by a private collector, art travels more than you might think. And when artwork – in particular high value and fragile pieces – is in transit, insurance becomes a priority.

But what are the concerns affecting the art world when it comes to insurance?

The turning point
In 2014, a fire at Momart warehouse, the East London art transport agency, destroyed nearly £50m of art resulting in a spike for insurance premiums. This fire was a wake-up call for insurers, and they now more closely analyse the risk of storing art in warehouses.

To decrease risk, insurers now recommend ‘not putting all your eggs in one basket’, i.e. not storing a large number of valuable items all under one roof, and the number of freeports has increased as a result.

A bump in the road
When a painting flies, it doesn’t ‘live it up’ in first class. Instead, art is often consigned to the same fate as lowly economy seat holder’s suitcases: the hold.

While you might want to add up your own air miles to qualify for rewards schemes, paintings typically ‘suffer’ when they clock up miles – both from potential damage and ever-rising insurance costs.

It’s the little bumps and knocks that cost in fine art insurance. Inadequate packaging and careless airport officials are often the culprits. Luckily, it’s possible to get works covered for depreciation in value due to damage in transit.

You can limit the risk by choosing a reputable fine art shipper.

In case of catastrophe
As well as any knocks and bumps, the risk of catastrophe could also affect the insurance costs for your artwork. From travelling through Florida and putting your painting at risk of hurricanes, to a trip to LA that necessitates earthquake cover, travelling through certain areas presents specific risks that will up your premiums.

An ‘all risk’ policy might be best if you want to cover a piece from every eventuality, but collectors can work to protect their art, and lower their insurance outgoings, by not moving their paintings so often.

The death effect
When a popular artist dies, the paintings they created in their lifetime are then in limited supply, meaning that they can sometimes increase dramatically in value. Some policies automatically increase the cover on pieces if they have a ‘death of the artist’ clause, so that you’re covered for the increased market value should anything happen.

Rare Finds: Underinsured jewels hidden in the home

Whether inherited and passed down to you over decades or bought and collected by you personally, owning antiques is thrilling and adds intrigue and curiosity to your home. Having your antiques valued regularly may seem unnecessary, but insuring them accurately depends on correct, up-to-date valuations. Therefore it is often the case that antiques are grossly underinsured. So, if you own antiques, do you know what’s at stake? Let’s take a look at some surprising finds to pop up around the UK.

Lost Richard Dadd watercolour
In 1986, a man brought in a painting he’d stored away in his attic for years onto the BBC’s Antiques Roadshow. Unsure of its value, the owner was shocked to find the painting was in fact a lost watercolour by none other than Richard Dadd from 1857. It was valued at £100,000 and was later sold for the same price to the British Museum.

Bronze Jardinière
Similarly, in 1991, a bronze pot appeared on the Antiques Roadshow. The owner had used it for many years as a living room plant-pot. He was stunned to hear that the plant-pot was instead a genuine French ‘Japonisme’ urn dated 1874. The urn didn’t go on sale until 2012 where it sold at auction for a staggering £560,000.

Rare Chinese pot
For 40 years, a Hertfordshire woman used a Chinese pot over 200 years old as a doorstop in her cottage. Little did she know that this was a very rare artefact indeed, as it was valued at £20,000. When the owner decided to sell the pot, it fetched £150,000 at auction.

The changing face of high net worth

There’s far more that goes into mid net worth, high net worth and ultra high net worth insurance than the policy limits which defines them.

Each step-up in classification, for the most part, brings with it a more personalised level of service, and fewer restrictions, as insurance providers understand that an increase in net worth can bring more complicated risk scenarios.

As these above-standard needs are having to be met with a more robust insurance solution, which naturally comes with a higher premium, policyholders quite rightly come to expect a higher-quality level of service, including a faster claims settlement.

The service demands may remain, but the delivery expectations have changed.

Just like the older generation, HNW clients under the age of 35 still have high expectations of service – but just in a different way, as Lennox Bunting, London market manager at Zurich Private Clients explains,

“The younger generation expects insurance providers to be available 24/7, with electronic access to policy documentation and more ways of getting in touch, like web chat. Whereas the older generation tends to favour the more traditional routes of getting in touch with us and may appreciate receiving documentation in the post.” He said.

“That said, the younger generation does still want to develop a relationship with a provider that can grow with them.”