Understanding market realities of art insurance

Whichever way you look at it, it is essential to approach an insurance agency specializing in high net worth clients. A recent article by Bloomberg news agency throws light on market realities of art insurance in the US. Some of the facts are valid and worth considering in Indian context as well so we take a look at them.

Most homeowners’ policies from ubiquitous mass-market providers tend to have lower limits that won’t cover specific valuable items over a certain limit. Such policies generally lack special services such as compensation for appreciation or probable loss in value. Collectible values may not to rise and fall with the market index, something which lures investors.

About 75 per cent of people in the US with a net worth of over $5 million get for themselves homeowners’ insurance policies from any of the mass-market providers. These comprise Allstate or State Farm, according to the president of consumer lines at Chartis US, Charles Williamson. The insurer is attracting nearly 80 per cent of its new private clients from insurers like Geico and State Farm.

Wealthy investors are realizing that art and other collectibles need a far more TLC. Insurers like Chartis, Chubb and Fireman’s Fund Insurance provide specialized property insurance policies for collections that range from artwork to rare autographs, which can be had separate from homeowners’ coverage sold by the carriers. There is fixed cost for artwork insurance for specific amount of coverage. It varies based on such factors as where the collector is based and also the size of the collection.

In India too, there is growing about art insurance. Tata AIG General Insurance Company launched its Fine art and valuables insurance plan earlier this year for its High Net Worth Individuals. HNI customers and their families remain the exclusive focus of the group. It offers cover for fine art, jewelry, antiques and many other valuables.

Their art collection management services include a wide array of services like Customized policies, Transit supervision, Vulnerability assessments, Streamlined appraisals, Conservation and storage assistance etc.