The importance of reappraising fine art and collections to current value

Many types of collecting categories such as fine art have experienced strong increases in value over the last decade. While some collectors enjoy closely tracking their ‘passion assets’ along with other investments in their portfolio, many others are not attuned to fluctuations in desirability and market value, preferring simply to enjoy these objects.

The need for reappraisal

For insurance purposes, it is essential that up-to-date values be reflected in insurance policies. Collecting categories in need of specific valuations include, but are not limited to:

• Fine art
• Jewellery and watches
• Wine and spirits
• Football cards and sports memorabilia
• Stamps and coins
• Classic cars
• Luxury handbag collections and other similar collectibles
• Rare books and manuscripts

Chubb recommends obtaining reappraisals more often for collecting categories experiencing higher volatility. Keep in mind that policy provisions and premiums will differ depending on value and the collecting category. Some fine art policies, for example, will pay over a scheduled amount to accommodate rapid appreciation in value.

Chubb’s Risk Consultant team may be able to provide guidance on when to seek a reappraisal, depending on the type of asset and the pace of its market. This best practice helps ensure that a collector receives the appropriate replacement cost (if applicable) for an item in the event of an unforeseen covered loss such as theft or accidental damage.

Finding a qualified appraiser

There are many nuances to the fine art and luxury collectible markets, including changing trends in taste. Given the complexity of these markets, it is essential to identify a skilled appraiser who can accurately value the unique nature of an asset in the context of its category. Generally, the best appraisers possess a combination of education and experience in their area of professional focus.

Depending on the nature of an object being assessed, an appraiser with highly specific expertise may be necessary. For example, an appraiser specialising in Old Master paintings may not be an appropriate choice for valuing an artistically significant modernist sculpture.