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Insurance Considerations for the Art Collector.
As a serious art collector, you're likely quite aware that if your most prized piece of art is ever damaged or stolen, no amount of money or insurance will ever be able to truly replace it. However, you've likely invested a considerable amount of money in your collection, which you should be able to recover. Compare these methods for insuring your art collection, and make sure your investments are protected with the coverage that's right for you.
Option 1: Your standard home insurance policy.
A standard home insurance policy typically includes personal property coverage to help protect the valuable possessions in your home. An art collection would likely fit into this category, however, it's important to keep in mind that your coverage limits for this type of collection are very limited under this type of policy. Typically a standard homeowners policy would only pay out about $200 for a collection that was damaged or stolen in a covered peril regardless of the value of your collection. This means that in the event of a burglary or home fire, you would only be eligible for $200 towards the value of your collection. If the value of your art collection exceeds your contents coverage limit on a standard home insurance policy, you may consider purchasing additional protection.
Option 2: A scheduled endorsement.
An endorsement is an extension of coverage added to your existing homeowners policy for an item or items such as an art collection. It offers more comprehensive coverage and is able to protect your collection up to its full value. You will want to have a complete inventory of your collection, including an appraisal, as your homeowners insurance agent will likely ask for these things when scheduling an endorsement on your policy. One advantage of this option is that you'll be continuing your relationship with your existing carrier. That means in the event of a peril that affects your collection and other parts of your home, you will work with only one company to settle your claim. However, it's important to double check exactly what you'll be covered against. For example, does the endorsement cover your collection to its full value in the event of all perils? Or does it exclude theft? These are all important questions for your insurance agent. You also should check to see whether your coverage will increase as pieces in your collection appreciate in value. If not, you'll need to revisit your limits on a regular basis to make sure you're still fully covered.
Option 3: A personal articles floater.
Another insurance option for your art collection is to purchase a personal articles floater a standalone policy from a separate provider that specializes in insuring fine art. An established art insurer will be best qualified to help you appraise your collection and determine the proper limits and coverages for each piece that you own. Depending on the value of your personal collection and the level of protection you're looking for, consulting an art insurance expert may be the smartest option for you. This also gives you the option of insuring each piece separately. Again, check to determine exactly what you're insured against and to see whether coverage will appreciate as the value of a piece increases over time. Typically a personal articles floater will provide the most extensive coverage available against all perils. Your collection may not include a Picasso or Monet, but it's still extremely important to take smart precautions in order to help protect yourself from financial loss. Work with an expert licensed agent to determine the best type of insurance coverage for your most prized pieces of art.
This article was contributed by Carrie Van Brunt-Wiley, Editor of the HomeInsurance.com blog. Carrie has been writing insurance news and consumer information for HomeInsurance.com since 2008. She graduated from the University of North Carolina in Wilmington in 2005 with a B.A. in Professional Writing and Journalism.