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A collector’s guide to appraisals

woman hanging painting at gallery

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 also help you make sure your valuable items are insured to their current replacement value, which provides protection against market fluctuations and value loss.


Fair market value vs. Replacement value

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).


  • Fair Market Value is the price at which property would change hands between a willing buyer and a willing seller, if neither felt like they had to buy or to sell and both have reasonable knowledge of relevant facts.1 This value is often used for appraisals or if you want to sell the item.
  • Replacement Value is most often used for insurance on fine arts and collectibles. It is the value of an object, and the amount that would be required if you needed to replace the item with another of similar age, quality, origin, appearance, provenance, and condition within a reasonable length of time, in an appropriate and relevant market.2 Replacement value assumes that, in the event of a loss to personally owned fine arts or collectibles, the owner would like to replace the item as quickly as possible. This means that often an item would need to be replaced in a retail setting instead of in a secondary market such as an auction. It also accounts for fees, taxes and services such as framing. Because of these other factors, replacement value is higher than fair market value.


What to look for in an appraisal

A comprehensive appraisal report includes:

  • Client name and address
  • Appraiser’s contact information and qualifications
  • Purpose of the appraisal (insurance, estate, etc.)
  • Method of valuation (market comparison, cost approach, etc.) and the market in which valuation is applied
  • Type of valuation and its definition
  • Relevant dates including date of inspection, appraisal and report issuance
  • Assumptions, disclaimers, and limiting conditions
  • Thorough description of objects including artist, origin, style, media, marks, signatures, measurements, age, condition, and provenance
  • Firm statement of value (not a valuation range)
  • Valuation support including comparable examples, market analysis, and sources

In addition, the appraisal document should be printed, not handwritten, and should always be signed by the appraiser.


Choosing an 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.

If you would like to find out more on how you can protect your prized collections and other valuable possessions, leave your contact details via the 'Contact Me' button below and our representatives will get in touch with you.


IRS publication 561

Appraisers Association of America, Definitions of Value, 2019

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Disclaimer - The content of the above article is not intended to constitute professional advice. Although all content is believed to be accurate, Chubb Insurance Singapore Limited (Chubb) makes no warranty or guarantee about the accuracy, completeness, or adequacy of the content of this article. Users relying on any content do so at their own risk.

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