Insuring Your Art Collection: Everything You Need to Know
How to insure your collectibles and collections
Your art collection is probably one of your most prized possessions, but it can also be one of the most difficult to insure. That’s because art insurance often comes with high premiums and plenty of exclusions, and you’ll need to take the proper steps to protect it from damage or theft.
The good news? If you have enough appraised value in your collection, you may qualify for extra protection from your home insurance provider—or even full coverage under certain circumstances. So whether you’re looking to start or expand your collection, here are some of the basics you should know about insuring art collections and collectibles.
What’s a collectible insurance policy?
A collectible insurance policy is a premium policy that covers art and collectibles. This type of policy is designed to protect your investment—whether that be antique art, legacy jewelry or a priceless vase—in case of damage or theft. However, while collectible insurance policies are usually more expensive than standard homeowners or renters insurance policies, they also offer more comprehensive coverage specific to the needs of the owner, as well.
Considerations for Policies
If you’re considering getting an insurance policy to cover your collectibles, it’s important to know that it’s not as simple as a one-size-fits-all policy. In fact, there are a lot of coverage areas you should consider, so if you’re in the consideration phase, make sure you sit down with a trusted agent to go over your options. Here are a few things you should review when shopping for a collectibles policy:
- Coverage Settlements
When you itemize your pieces of artwork, many insurance companies will cover them for the agreed value. That way, in the event of a total covered damage or loss, you receive the full amount of the agreed value, with no depreciation. However, other policies allow for market appreciation and may pay over the agreed value if the value has increased considerably. Another option is to receive a cash payout in the event of damage or loss if an item is irreplaceably damaged.
- Newly Acquired Items
Still building your collection? You’ll want to ensure you have immediate coverage for new acquisitions. Then, within 90 days, you’ll be covered for at least some of the total itemized coverage.
- Pairs, Sets and Parts Coverage
When dealing with sets (like antique chess or even jewelry) you always have to consider the value of the item alongside its other pieces. With Pairs, Sets and Parts coverage, you can hand over the remaining pieces, and coverage will be paid out for the entire set.
- Loss of Market Value
Sometimes, if a work of art is damaged, it can lose a lot of market value—quickly. With Loss of Market Value coverage, your insurer may not only pay to repair the item, but also compensate for any loss to value.
How much does collectible insurance cost?
On average, collectible insurance policies cost between 1% and 3% of the total value of the collection. That means, if your art collection is valued at $100,000, you can expect to pay between $1,000 and $3,000 per year in premiums. However, it’s important to note that these are just averages, so it’s worth getting a quote from your trusted insurance broker, first, before committing to a particular policy.
While there are many things to consider when insuring your art collection, one thing that shouldn’t deter you from doing so is cost. When deciding how much collectible insurance costs, it helps to remember that owning valuable artwork provides financial security as well as emotional benefits. After all, we all want our collections to grow in value over time!
Hiring a professional appraiser
One of the first steps in insuring your collection is knowing its market value, and the best way to do that is through a professional appraisal. Hiring a professional appraiser is the best way to do this, as they will have the expertise and experience needed to accurately assess your collection. Fortunately, the cost of having an appraisal done is small (especially when compared to the value of your collection) and ranges from $200 to $500, depending on the size and type of items in your collection.
Whether you’re an accomplished collector or just starting out with your first purchase, we at Penny Insurance are here to help you keep your most valued possessions safe. If you’d like to schedule a consultation or get a quote for any of your needs, please contact us and let us know.