Many homeowners make the assumption that their art collection is covered under their homeowner’s policy. Some of these collectors may be shocked to learn that certain homeowner policies specifically exclude fine art items. In many cases, there is a limit on the coverage of individual pieces of art. Such limits can be under $1000. With this reality in mind, every individual who owns even a small collection of fine art should review their policy.
     Individuals with art collections should have a fine arts insurance policy not only because of adequate financial coverage but also because homeowners policies generally will not cover broken or lost items, provide worldwide coverage, and have limitations on transportation and off-site storage.
    There are basically two types of fine arts insurance coverages: scheduled and blanket. With scheduled policies, each item is individually listed on the policy for a stated insured amount. Insurers usually require an appraisal or a recent invoice if an item's value. Blanket policies are policies that allow a collector to obtain coverage of items without specifically itemizing the objects. Most blanket policies will include a maximum limit per item. While insured art is covered in the event of theft, fire or water damage or damage caused during transit, a policy will not pay for gradual deterioration, such as fading or cracking caused by natural or artificial light.
    Like all insurance policy the cost depends on the value of the potential loss. Thus, a current appraisal is necessary, and usually required by most insurers. For insurance purposes, the type of appraisal needed for that purpose is a replacement value appraisal. (See Types of Appraisals) This appraisal values the art for the highest amount. Although this also will increase the insurance premiums, but it insures full coverage. Whether your appraiser offers the service or you do it yourself, it is always beneficial to have a picture of your fine art items. This is particularly useful if the item is stolen.
     The cost of fine art insurance is fairly in line with homeowner’s insurance. However, premium cost can vary significantly, and one usually finds the best insurance values with companies that specialize in fine art insurance.

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