Q: I’ve been collecting for a few years and someone told me that other day that I should be insuring my work on an art insurance policy. Right now, I just insure everything on my homeowner’s policy. When do you think is the right time to begin an insurance policy for art, and how do those things generally work?
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A: Great question, but difficult to answer in the abstract. Of course the first place to begin is by calling your insurance provider or broker. In general, it’s good to know first what your current homeowner’s policy’s terms are for art and decorative objects. Some policies will cover any where from $ 10,000 to $50,000 per object for art and objects, and if you collect emerging art, that may be sufficient. The amount will vary based largely on the amount that your home is insured for, as well as how the coverage for your home works. If you are collecting beyond that range, however, you likely need a Fine Art Jewlery and Specie (FAJS) Policy. Here are the downsides to those policies: 1/ typically they require you to submit an itemized inventory (and as the works age, you may be required to provide appraisals or insurance valuation letters to substantiate decreases and increases in insured value); they are more expensive – not only per dollar, but also for the administrative costs associated with updating it every 2-4 years. Here’s the good news, though: they will typically provide for coverage of the full value of the work, and moreover may cover the costs of repairs or conservation (should they occur); and in the event that a work of art is damaged, the insurer will often take possession of the work in order to issue your pay out. For the large collections that we deal with at SLP, we often recommend a split between the two: all works under $10,000 (or $20,000, whatever the threshold is) stay on the HOI policy; the others are insured under a FAJS policy. This protects the work more fully, without overpaying for insurance on works on the lower end – as these are often works by younger artists, so you will be insuring them for longer; we’re therefore not only talking about the price per year, but for a longer number of years. So we’ll keep those lower-value art works on the home owner’s policy then do a collection appraisal every 2-4 years…after which point works may be moved from one policy to another.