The Value Of Damaged Art - From The Insurer's PerspectiveInsurers of fine art hear lots of reasons and excuses in their kind of work. Practically as many as third-grade instructors.

A pipe broke and sprayed water all over it. The shipping crates weren’t strong enough and broke. The movers dropped it. At some point, a pet is most likely to have eaten at least one collector’s painting.

But when it comes to securing and protecting the value of one’s art, the way a piece was damaged does not matter. What does matter a thousand – perhaps a million – times more is how the owner can go about bringing back the piece’s value – or recovering it if the piece is considered a total loss.

Safeguarding art’s monetary value isn’t really as easy as it may appear. There is a “book” value to your car, which assists insurance companies to decide if the cost of repairs will be higher than the total value of the vehicle. The worth of broken art, ornamental arts and antiques is more elastic and might result in disputes between owners and insurers.

“It’s always a fragile topic of discussion,” explains president of the New York art brokerage company DeWitt Stern, Steven Pincus.

What follows is a look at exactly what every art owner ought to find out about damage and restoration in the world of personal art collecting, and how owners can secure their pieces – and wallets.

 

Examining the damage

When everything goes as planned, the insurance adjuster will inspect even the damaged artwork, then a conservator provided by the insurers will see if it can be fixed and at what cost. Assuming the expense isn’t substantially more than the piece’s value, the artwork is quickly given to the conservator to start treatment.

“You don’t want a long hold-up since that might make issues much worse or even extend the period,” Dorit Straus explains, retired global fine art manager at Chubb, a leading art insurance company.

After repairs are made, an appraiser with expert knowledge in fine art or a dealer in the kind of art will evaluate the object to figure out if the value of the now-repaired work’s value has declined and by just how much.

This is where many troubles can start.

“There is no mathematical formula,” states Chicago-based insurance adjuster, Robert O’Connell. “The artwork could have a small tear in a canvas, but it matters more if the tear is at the center of the piece or right on the corner or edge”.

A policy for fine-arts normally will cover the whole cost of remediation and, if there is, say, a 30 % loss of value because of the damage, the insurance company will pay the insurance policy holder 30 % of the insured value.

When there are arguments about values sent by an appraiser for the insurance company and another by the insurance policy holder, many fine-art-insurance policies have arbitration clauses that generate a third appraiser to examine both appraisals.

With greatly damaged older artworks, the insurance industry’s fine-art appraiser or specialist may decide not to say that an object has actually been ruined, “unless it is no longer identifiable’’, states Chubb’s Ms. Straus. “Even severely tarnished works might retain cultural significance, although determining what that works out to in actual dollars isn’t really that simple”. With such rapid advancement in technology over the past century, we have been able to offer state-of-the-art art storage solutions even for the oldest of works, in attempt to prolong the life of world famous art pieces.

Choosing if a work can be repaired and if it keeps any value can be even more complicated when the artist is still living. Some artists might offer to fix their own works or want to choose and monitor a conservator, while others might hold the view that their creations would never ever be the same, asking that their names not be connected with the artworks.