While you may not want to think about a prized possession being stolen, damaged or lost, in reality these things happen all too often. Whether you own fine art, jewellery, antiques or even classic cars, having a current appraisal is an important part of owning valuable items.
As a statement of an item’s value, an appraisal provides the necessary documentation to substantiate the existence, condition, and value of your collection. It can be used when you want to sell or donate a collectible item or to help settle an estate. It can also help you make sure your valuable items are insured to their current replacement value, which provides protection against market fluctuations and value loss.
You may be surprised to learn that the value of an item can be measured in more than one way. When you commission an appraisal for your art and collectibles, the valuation methodology to be used will depend on the purpose of the appraisal. Two of the most common values for art and collectibles are Fair Market Value (FMV) and Replacement Value (RV).
Appraisals should comply with the Uniform Standards of Professional Appraisal Practice (USPAP), which are the widely recognized standards for appraisers. A comprehensive appraisal report includes:
In addition, the appraisal document should be printed, not handwritten, and should always be signed by the appraiser.
A qualified appraiser has a formal education in appraisal theory, methodology, principles, and ethics. He or she should also have specialized expertise in the material being appraised. For example, an appraiser who specializes in contemporary art may not be the best choice to appraise an Impressionist painting.
There is no government regulation of appraisers. Therefore, the best way to find a qualified appraiser is through one of the major accredited appraisal organizations — the Appraisers Association of America, the American Society of Appraisers, and the International Society of Appraisers. To obtain and maintain membership in these organizations, appraisers must complete courses and exams, and demonstrate years of experience. Additionally, members must strictly adhere to set ethical standards as outlined by USPAP.
Chubb can also provide a referral to a vetted appraiser — contact your Underwriter to request a referral.
1 IRS publication 561
2 Appraisers Association of America, Definitions of Value, 2019
We help you stay ahead and informed with these helpful tips and tricks