Have you spent years building your art or jewelry collection – or perhaps you just started?
Collecting valuable items is an expensive and sentimental hobby. The risk of damage or theft is always a main concern for collectors. Yet while most successful professionals are wise enough to insure their prized possessions, too often these valuables are underinsured or not insured properly.
So, how can you be sure that your favorite painting or family heirlooms are protected to their correct value? The answer is in the appraisal.
THE VALUE OF AN APPRAISAL
When it comes to the insurable value of your collectibles, an insurance company won’t just “take your word for it”. The carrier will require: (1) a bill of sale; or (2) a recent appraisal to add any new items. (***When adding any item, I would confirm that the insurance company is covering your valuable item based on an “Agreed Amount”***). If you don’t know what that means, we should talk!
It’s also important to review your homeowner’s policy and appraisals side-by-side to make sure that the limits are adequate for the value of your items. While most homeowner’s policies include coverage for certain valuable items, it’s usually limited. Be aware!
WHEN SHOULD AN APPRAISAL BE UPDATED?
If you’ve owned certain items for years, it’s possible that the insurance carrier has an old appraisal on file that does not reflect the current value. Since Jewelry and Fine Arts can fluctuate and increase (or decrease) in value over time, I recommend my clients get updated appraisals for high-value items every 3-5 years.
WHERE CAN I GET MY JEWELRY OR ART APPRAISED?
Some items can simply be brought back to where they were purchased and originally appraised to be re-evaluated. For those items that you’ve inherited and are not sure of the value or valuables which perhaps were not originally appraised, there are experts who can help. Conveniently, most jewelers can provide appraisal services. However, art appraisals may be more complicated to obtain. If you don’t know who can help, your insurance professional can make an introduction to the proper specialist.
(3) THINGS TO CONSIDER
1. Beware of Sub-Limits & Blanket Coverage
Many people believe their homeowner’s policies afford coverage for fine art and jewelry. The reality is that homeowner’s policies with the high-end carriers may offer some minimal blanket jewelry or art coverage up to a specified per-item limit and subject to the policy deductible.
So, if you have blanket coverage totaling $100,000 with a $10,000 per item limit, could you see where this could pose a problem? Therefore, it’s important that any items over your carrier’s specified blanket threshold are scheduled separately.
2. Work with Experienced Professionals
Working with an experienced jewelry, art appraiser, and insurance broker helps you save time and money.
3. Proving Value in the Event of a Claim
If you don’t have a recently valued appraisal and there is a claim, it’s likely the carrier will request other items and methods for proof of value. This will definitely include a police report, but they could also request to speak to witnesses, or friends and family about the item (whether it’s jewelry or art). Regular appraisals can help you prove an insurance claim and verify ownership.
An updated appraisal provides an accurate reflection of your assets. If you have high-value items that are not currently appraised or insured, let’s talk.
Opinions expressed in this article are solely the author’s opinion, not intended to provide the reader with legal or any other professional advice. Should you need advice or opinion, consult with a qualified professional to address your specific needs.