Art Conversations | Protecting Your Fine Art

Art Conversations: Protecting Your Fine Art with Ann Gonya, CAPI, CIC.

I recently spent an afternoon with Ann Gonya, Vice President at Maury Donnelly & Parr Insurance, discussing the importance of insuring one’s art investments.  As a seasoned insurer of art collections, she had a wealth of information to share on why you need the appropriate insurance to protect fine art.

Kathleen Hamill: I know that you work with insuring art on a daily basis.  Can you tell me about the recent trends that you are seeing in the Art Insurance world?

Ann Gonya: In recent years Post-War and Contempo­rary works have surpassed Impressionist and Modern as the highest grossing seg­ments of the market. This largely reflects a generational shift in collecting. Addi­tionally, art has become more accessible as collectors can now view and buy art online, at art fairs, and through social me­dia platforms like Instagram. While most collectors buy art as a passion, there are a growing number of collectors buying art with an eye toward investment.

KH: So, as a rule, is art covered under the buyer’s homeowner’s policy? I feel like a lot of collectors feel as though it is.

AG: A typical homeowner’s policy is designed primarily to protect your home, personal liability and the general contents of your home. Relying solely on your homeown­er’s policy may mean you’ll be paying significant out-of- pocket expenses if your fine art is lost, stolen or damaged.

Fine art insurance policies provide “all-risk” coverage for most causes of loss, with no deductible. Some insurance companies cover fine art items valued at less than $250,000 without an appraisal while other carriers may require a current appraisal for any single item exceeding $10,000. Collectors just need a good description and photo­graph of the item as well as the estimated value

KH: How does a collector protect themselves against a total loss if their piece or pieces go missing?

AG: If your fine art is lost or mysteriously disappears, you will want to replace it. Most homeowner’s policies exclude coverage for lost or misplaced items (sometimes referred to as “mysterious disappearance”).

The right fine art policy will cover misplaced, lost or stolen items. And, if the market value of an itemized article exceeds the amount listed in the policy right before it is lost or stolen, some high net worth companies will pay the higher market value, up to 150% of the itemized amount, so that you can replace the item with one that is comparable.

KH: Can you speak a little about gaps in coverage?  For example, where are some overlooked areas for an art loss?

AG: The majority of fine art losses occur while items are in transit. Make sure your items are covered at all times. Your trusted insurance advisor should be able to provide referrals to vetted art transporters you can trust. Collectors buying for investment often buy works by Post-War and Contempo­rary artists, market segments which have seen significant growth in recent years. Investment minded collectors can have a higher level of transit exposure as items are bought and sold frequently, loaned out to museums to increase their exposure, or moved into storage facilities if display is not a priority.

KH: In the excitement of acquiring a new piece, it is important to remember to protect your new investment.  Alex Cooper recently had a client who experienced an art insurance claim when his pipes burst.  His art insurance provider sent the pieces to an art restorer and handled the repairs and conservation.  He was very lucky he had that policy in place or he would have lost his life’s collection.  Thank you so much for your time sharing your insights.  We look forward to hearing more in our next Art Conversation!

Ann Gonya is a Vice President in the Private Client Group and specializes in providing comprehensive risk management evaluations and program implementation. She provides a thorough analysis of existing personal insurance policies, identifies the assets at risk, and creates customized personal insurance portfolios with an on-going, consultative approach. MDP, Maury Donnelly & Parr, is a professional insurance agency devoted to keeping its insured protected and providing the best insurance solutions possible. MDP strives to offer personalized levels of service in our niche programs as well as a wide range of insurance knowledge to write most classes of business, regardless of their size. Our goal is to provide insurance of the highest quality so every client may obtain coverage levels that are right for their unique situation and to always value coverage over policy price.