Major fine art purchase, extra insurance?

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slalom
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Major fine art purchase, extra insurance?

Post by slalom »

I never thought I would be one of those people but I just spent a whole lot (high 5 figures, a lot for me anyway) on a piece of artwork - I have specifically wanted this exact piece for nearly my entire life and it came to auction.

Now that I'm receiving it soon - I'm worried - is it usually necessary to specifically add it to my insurance policy as a rider or if I have proof of value (what I paid at least) and adding it doesn't go over what my policy covers for belongings, is that enough?

I've tried to decipher the policy AND tried talking to them but am still confused.. just wondering what other people here have done if you were in this situation and what is typical...
simplextableau
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Re: Major fine art purchase, extra insurance?

Post by simplextableau »

Read your policy but my bet is there is a limit on collectibles of $1,000 or so unless you obtain a specific rider.
DoubleComma
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Re: Major fine art purchase, extra insurance?

Post by DoubleComma »

I would schedule it on your existing policy. Company specific, but you will probably need an official appraisal to have it scheduled. Receipt from auction likely isn’t sufficient.

This is what we have done for several collectibles and jewelry pieces I would rather not self-insure.
adamthesmythe
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Re: Major fine art purchase, extra insurance?

Post by adamthesmythe »

I don't own any artwork that valuable but I know people who do.

There are insurance companies that are more accustomed to this sort of thing. Chubb?? At the lower end of the value you are talking about a more ordinary insurance company may be OK. However if YOUR insurance company doesn't know what you are talking about you may need to look further.

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ResearchMed
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Re: Major fine art purchase, extra insurance?

Post by ResearchMed »

We have several "high value items" separately scheduled on our homeowner's insurance.
They used the receipt for anything recently purchased, or an appraisal for anything that wasn't recently purchased OR where we wanted to update the value (higher or lower).

Try to take care of it before it arrives, given the value. Unless you have an unusual type of regular insurance, almost none of this value will be insured, and even for that, it might be only some types of loss.
(We have "all losses" for our valuable items, which includes mysterious disappearance. That means that if something gets lost, it's covered without needing to try to blame it on someone, etc.)

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cchrissyy
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Re: Major fine art purchase, extra insurance?

Post by cchrissyy »

the answer to "what is typical" is you already have some dollar amount of coverage for your personal property, and some other dollar amount for valuables like cash, jewelry, art.
you need to call the insurance company to ask what your actual numbers are and can they be adjusted.
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HMSVictory
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Re: Major fine art purchase, extra insurance?

Post by HMSVictory »

As the above poster noted you need the receipt or an appraisal for the value of the item.

It has to be scheduled on a rider for your homeowners policy and the insurance company will want to know about alarm, fire systems, vaults and any other protections in place to prevent damage or theft of the item. I have a number of valuable items scheduled and they are all stored in a vault which cuts the rate down dramatically but I still have coverage when they are not stored in the vault. My policy covers mysterious disappearance which can happen with something like this (no signs of forced entry and the art work is just plain gone).
Stay the course!
rjbraun
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Re: Major fine art purchase, extra insurance?

Post by rjbraun »

I have a couple of musical instruments on a separate rider to my homeowner policy. I already had coverage with Chubb when I added the items. In one case the purchase was recent and Chubb used the sales receipt for valuation. In the other, they took a recent appraisal I happened to have.

As another poster noted, not all insurers will write a rider for higher-valued items; the maximum coverage may be a fraction of what you are interested to insure. That happened to me when I tried to comparison shop prices a few years ago.
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Picasso
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Re: Major fine art purchase, extra insurance?

Post by Picasso »

My parents have a high six figure art collection (~35 paintings) and my father’s big regret is every telling the insurance company
they exist. They can never get rid of the insurance and the risk is small anything will happen. Also, it makes it difficult to avoid estate tax on them (if applicable to you) since they are on the roster.

Is this contemporary photography? I’m trying to think what you could track and acquire for that price.
DVMResident
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Re: Major fine art purchase, extra insurance?

Post by DVMResident »

Insurance a mean to offset the risk of monetary loss.

Do you care about the monetary value loss if the art was damaged? Or are you just enjoying, AKA consuming, the value?
To me, it's like insuring a vacation or fancy dinner. The dollars lost of something going sideways is immaterial. The value is the joy it brings.

Now, if the art was my livelihood, my answer would change.
fposte
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Re: Major fine art purchase, extra insurance?

Post by fposte »

I found that a piece I'd inherited from my parents had grown in value to be worth more than my middle-aged Honda Civic. Since there was no longer any purchase information on the item, I needed to get an appraisal from a certified art appraiser, and I then purchased a specialized art rider on my insurance. It's $60 per year now.

I can see the point about choosing not to insure; for family reasons, it made sense for me to take a good stewardship approach, and for a long time it was totally out of sync with the value of anything else in the house, which made me uneasy.
Jaylat
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Re: Major fine art purchase, extra insurance?

Post by Jaylat »

We just went through a major insurance claim for water damage. No riders, but the company (eventually) covered all items, including some expensive rugs.

The most valuable item was a piece of museum grade furniture valued in the high 5 figures. Luckily the damage seems nominal, but the insurance company never tried to say it wasn't covered. They dragged their feet as much as they could, though.
lhl12
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Re: Major fine art purchase, extra insurance?

Post by lhl12 »

slalom wrote: Fri May 13, 2022 5:29 pm I never thought I would be one of those people but I just spent a whole lot (high 5 figures, a lot for me anyway) on a piece of artwork - I have specifically wanted this exact piece for nearly my entire life and it came to auction.

Now that I'm receiving it soon - I'm worried - is it usually necessary to specifically add it to my insurance policy as a rider or if I have proof of value (what I paid at least) and adding it doesn't go over what my policy covers for belongings, is that enough?

I've tried to decipher the policy AND tried talking to them but am still confused.. just wondering what other people here have done if you were in this situation and what is typical...
Congratulations! It's very exciting to be able to acquire something that you have wanted your whole life.

At that price point, especially if you envision further purchases, I'd suggest exploring one of the insurance companies that specializes in this sort of coverage as part of your normal homeowners policy. The big three in this area are Chubb, AIG and PURE. All three work through independent agents so you can just contact your agent and ask them to quote a new policy for you (specifying the fine arts coverage as part of the quote). I'd suggest quoting all three simultaneously, and also ask for an updated quote from your current homeowners policy. You can then compare all four on an apples-to-apples basis and pick whichever suits you best.
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ResearchMed
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Re: Major fine art purchase, extra insurance?

Post by ResearchMed »

lhl12 wrote: Sat May 14, 2022 9:47 am
slalom wrote: Fri May 13, 2022 5:29 pm I never thought I would be one of those people but I just spent a whole lot (high 5 figures, a lot for me anyway) on a piece of artwork - I have specifically wanted this exact piece for nearly my entire life and it came to auction.

Now that I'm receiving it soon - I'm worried - is it usually necessary to specifically add it to my insurance policy as a rider or if I have proof of value (what I paid at least) and adding it doesn't go over what my policy covers for belongings, is that enough?

I've tried to decipher the policy AND tried talking to them but am still confused.. just wondering what other people here have done if you were in this situation and what is typical...
Congratulations! It's very exciting to be able to acquire something that you have wanted your whole life.

At that price point, especially if you envision further purchases, I'd suggest exploring one of the insurance companies that specializes in this sort of coverage as part of your normal homeowners policy. The big three in this area are Chubb, AIG and PURE. All three work through independent agents so you can just contact your agent and ask them to quote a new policy for you (specifying the fine arts coverage as part of the quote). I'd suggest quoting all three simultaneously, and also ask for an updated quote from your current homeowners policy. You can then compare all four on an apples-to-apples basis and pick whichever suits you best.
If you already have a policy and an independent insurance agent that you feel comfortable with (perhaps through an earlier claims process), then if you don't already have it, ask about a high-value home policy, if that is appropriate. This is the underlying policy, not the valuable items rider. But it makes the entire claims process nicer (if that is possible).
When we asked our agent about Chubb, she pointed out that we already have much of what Chubb would offer. Not everything, but also not as pricy as Chubb. She may have an incentive to "keep us", as I'm not sure if they sell Chubb.
However, we've had a number of claims of various types over the past several decades, in more than one home, and all were handled well. So we have had no reason to move to Chubb. When we moved here 20 years ago, it was the first house that was "Chubb-worthy". However, given our good experiences with the claims we've had with current insurer (and agent helping us), we weren't really eager to jump into the unknown.

A few claims were for separately scheduled valuable items, and each of those was handled with a very polite "Would you like for us to try to find a replacement(s), or would you prefer a check and you can find something yourself?"
I still find that surprising.

RM
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fyre4ce
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Re: Major fine art purchase, extra insurance?

Post by fyre4ce »

Picasso wrote: Fri May 13, 2022 9:11 pm My parents have a high six figure art collection (~35 paintings) and my father’s big regret is every telling the insurance company
they exist. They can never get rid of the insurance and the risk is small anything will happen. Also, it makes it difficult to avoid estate tax on them (if applicable to you) since they are on the roster.

Is this contemporary photography? I’m trying to think what you could track and acquire for that price.
I don’t understand why your parents can’t drop the insurance on the art, once they have a policy in place. Are they worried the insurance agent is going to burglarize the house at 12:01am the day after the policy expires?

And surely your parents wouldn’t think of evading estate taxes on their art collection, whether they were insured or not.
doobiedoo
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Re: Major fine art purchase, extra insurance?

Post by doobiedoo »

As with insuring anything, e.g. home, auto, life, medical, .., one must weigh the cost of the insurance against the affordability of the loss and the likelihood of loss. Only the OP can do this for him/herself.

In my case, I bought a violin for $45k. I do not earn any income from it. My homeowner's policy would only cover $1-$3k as a "collectible". A separate "collectible policy" [from another company] was $150 per year with a $5k deductible.

I could absorb the $45k loss without any impact to my lifestyle. And the chance of loss when it is in my home is primarily due to a fire. But there is a bigger chance of loss when I play it outside my home, which I do regularly. And then there is the car travel to/from those events. At $150/year it would take 266 years for the insurance payments to match the insured value.

I decided it was "penny wise, pound foolish" to try save money on the premiums.
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Picasso
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Re: Major fine art purchase, extra insurance?

Post by Picasso »

fyre4ce wrote: Sun May 15, 2022 1:51 am And surely your parents wouldn’t think of evading estate taxes on their art collection, whether they were insured or not.
Surely not…………….
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TomatoTomahto
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Re: Major fine art purchase, extra insurance?

Post by TomatoTomahto »

No insurance help here, but I wanted to give a heartfelt shoutout to those BHs who spent some of their money on objects of passion (art that spoke to them, a musical instrument, etc.). Good on ‘ya! What a nice way to wake up on a Sunday morning. :sharebeer
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rjbraun
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Re: Major fine art purchase, extra insurance?

Post by rjbraun »

lhl12 wrote: Sat May 14, 2022 9:47 am
slalom wrote: Fri May 13, 2022 5:29 pm I never thought I would be one of those people but I just spent a whole lot (high 5 figures, a lot for me anyway) on a piece of artwork - I have specifically wanted this exact piece for nearly my entire life and it came to auction.

Now that I'm receiving it soon - I'm worried - is it usually necessary to specifically add it to my insurance policy as a rider or if I have proof of value (what I paid at least) and adding it doesn't go over what my policy covers for belongings, is that enough?

I've tried to decipher the policy AND tried talking to them but am still confused.. just wondering what other people here have done if you were in this situation and what is typical...
Congratulations! It's very exciting to be able to acquire something that you have wanted your whole life.

At that price point, especially if you envision further purchases, I'd suggest exploring one of the insurance companies that specializes in this sort of coverage as part of your normal homeowners policy. The big three in this area are Chubb, AIG and PURE. All three work through independent agents so you can just contact your agent and ask them to quote a new policy for you (specifying the fine arts coverage as part of the quote). I'd suggest quoting all three simultaneously, and also ask for an updated quote from your current homeowners policy. You can then compare all four on an apples-to-apples basis and pick whichever suits you best.
In addition to those three insurers mentioned, apparently, Cincinnati is also interested to break into the higher-end of the homeowners market. At least that was the case earlier, which I touched on in a couple of previous threads. I am still with Chubb, which bumped the premium another 18% or so the last renewal cycle (no claims filed, ever - I know, that doesn't mean the premium can't rise significantly). I am guessing I might have been better off from a cost standpoint switching to Cincinnati earlier, though I guess it's hard to say, for sure. Anyway, to the extent anyone has experience with Cincinnati, I would still be interested to learn more about them.

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