This piece was adapted from an article written by partner Judy Nelson for the catalogue of Historic Fort Worth’s 2012 Preservation is the Art of the City art exhibit and sale. The sale benefits both participating local artists and the preservation projects of Historic Fort Worth, Inc.
The ultra-rich have problems with their art. They can’t just go to an art fair or gallery, browse around, pick out something that will look good over the sofa, bring it home and enjoy it. No, they must constantly monitor the financial performances of the artists in their collection. For instance, I recently learned that in June a 1981 painting by the artist Jean-Michel Basquiat sold for a little more than $20 million, nearly 40% higher than the $14.6 million price it fetched in May 2007.
This is important news to wealthy art collectors. It could be vital to their portfolios.
I, on the other hand, rarely consider how the market is trending in regards to the artist who painted that rooster in my living room. Investment or financial value is only one factor that I consider in buying art. I also look at aesthetic values and take into account my emotional response to a potential purchase. “Is this a good investment?” becomes “Is this a good value?”
Finding good value when you buy art includes remembering a few basic facts, some of which are listed below. It’s not a complete list of Collecting Do’s and Don’ts, but if you remember them as you grow your art collection, you’ll have few regrets.
1. Most artwork does not appreciate in value. A painting will lose about half of its resale value as soon as it leaves the gallery, much like a car loses value the minute you drive it off the lot. However, a painting does not need tune-ups and probably will not be recalled.
If you buy a painting for $2,000 that you absolutely love – that is YOU and all you aspire to be - and you keep it for 20 years, it will cost you $.27 per day. That’s $.27 for aesthetic pleasure, interior design and maybe even spiritual enlightenment. In terms of enriching our environments and our lives, art is a solid investment.
2. Art is subject to fashion. Remember those paintings and prints of howling coyotes from New Mexico? Remember shoulder pads? If you hoarded either of these items with you will be holding on to them for a while longer, because tastes have changed. Which is not to say that coyotes in shoulder pads will not be in demand in the future. Art, like the stock market, is cyclical. You must buy what you love with the full knowledge that you have probably been influenced in your choice by what’s popular – and available - today.
3. Just because you recognize the artist’s name does not mean that you should buy a work by them. Please try to avoid prints by Salvador Dali, Picasso and Marc Chagall. Forgeries of their work are common. Also, there can have been more than one printing of a particular image, in different sizes or on different paper, either during or after the artist’s lifetime, so it is hard to know what you are getting. Even if the prints are authentic, they are usually overpriced, and a “Certificate of Authenticity” can be a worthless guarantee.
Works by such well-known artists as Peter Max, Erte, LeRoy Neiman and Thomas Kinkade are also often overpriced, especially when they are for sale in galleries in upscale malls and resorts.
As an alternative, consider looking for an original print, numbered and signed by the artist. If you see something like “1/25” written on a piece, you know that you are looking at a print of some kind, and that the artist made 25 (or so) of these prints to sell.
4. Be careful about buying art on a cruise ship. This is another area where you can really overpay, especially after several glasses of free champagne.
5. Limited Edition prints, even those signed by the artist, rarely appreciate in value. Don’t believe the hype that you read on eBay. I have appraised hundreds of these, and most are later resold for far less than they originally cost.
6. Giclée is a fancy, made-up word for an inkjet print that is not an original work of art. That is all. Do not be intimidated by the pronunciation, the accent mark, or anyone trying to sell you one. (For the record, the “G” is soft – as in “Zhee-clay”- with the accent on the second syllable.) And if an artist can make one inkjet print, he can theoretically make a thousand, so you are NOT buying an original, one-of-a-kind work of art, even if they say that the number is limited.
7. Trust your taste, but always be open to what is new or out of your comfort zone. For my birthday this year, my son gave me a print by a contemporary artist. The subject matter and the style were edgy and different from what I generally respond to. I would not have bought this work on my own, but it is now hanging in my home, and challenges me every day when I look at it.
8. Buy over the Internet with care. While the World Wide Web has made it possible for us to view a mind-numbing number of artworks, looking at a work on a screen will not give you a sense of such aspects as scale or texture. The color in the image on the screen may not be true; condition can be poor.
Your best bet is to see a piece in person, or work with a reputable dealer who will let you return the work if it does not meet your expectations.
Finally, remember that the word value can mean more than just monetary worth. It may also refer to other qualities that can enhance our daily lives, and this enrichment is what collecting art is all about.
Friday, August 31, 2012
Wednesday, July 13, 2011
1933 Saint-Gaudens Gold Trial
The fate of a handful of rare coins, valued at more than $20 million, will be determined in Philadelphia this week. The federal trial that should decide whether a Philadelphia family or the government owns 10 1933 Saint-Gaudens gold $20 double eagles will begin July 7 in Philadelphia’s U.S. District Court.
One of our Associates, Steve Roach – an attorney, America’s expert on the rare coin market and Associate Editor of Coin World, the world’s largest hobby publication, will be attending the trial starting July 11, providing daily updates online at www.coinworld.com and through social media including his Twitter account @roachdotsteve.
He has provided Guernsey, Nelson and Associates the following article with background on this very interesting case he is following:
A Rich History:The legal dispute over the ten 1933 Saint-Gaudens gold $20 double eagles began in 2003 when Joan Langbord, the daughter of Philadelphia coin dealer Israel Switt, allegedly learned that a family safe deposit box contained the coins. She and her two sons, Roy and David, transferred the coins to the U.S. Mint for authentication in September 2004.
In May 2005, the Mint authenticated the coins but refused to return them or initiate forfeiture proceedings. The Langbords sued the government in December 2006. On July 28, 2009, Judge Davis ordered the government to file a forfeiture action, ruling that the coins were unlawfully seized. The government filed its amended complaint for forfeiture and declaratory judgment against the Langbords and the 10 coins on Nov. 10, 2010.
The government’s case attempts to create a framework for the 10 1933 double eagles as being embezzled or stolen from the Mint and wrongfully retained. The Langbords have argued that there was a window of time where people could legitimately obtain 1933 double eagles from the Mint cashier, and that some pieces may have left the Mint that way.
At the heart of the case is the problem of proving actions alleged to have taken place in the 1930s and 1940s. To this end, both sides have retained three experts each, including numismatic experts David Enders Tripp, who is testifying on behalf of the government, and Roger Burdette, the numismatic expert retained by the Langbords.
A Landmark Case:
The case is important for several reasons. Most obvious is that the coins are extremely valuable. On July 30, 2002, at Sotheby’s in New York, more than 700 people watched as six different bidders fought for eight minutes until the 1933 Saint-Gaudens double eagle allegedly once owned by Egypt’s King Farouk sold for $7.59 million, plus $20 to officially monetize the coin. The buyer of that coin has remained anonymous.
If the Langbord coins are legal to own, the Professional Coin Grading Service Million Dollar Coin Club estimates that they would bring $2.5 to $3.5 million each at auction. Numismatic Guaranty Corp. posted a press release to its website on Nov. 3, 2009, announcing that it had graded the Langbord coins. One was graded Mint State 66, two were MS-65, six were graded MS-64 and a single one received an NGC UNC Details, Improperly Cleaned grade. The press release was removed from the NGC website several days later, adding further mystery.
In a larger sense, any court ruling that would question a collector’s right to own coins not issued as legal tender could jeopardize other legendary U.S. rarities like the 1913 Liberty Head 5-cent coin.
***
Steve Roach is a Dallas, Texas, based rare coin appraiser and fine art advisor who writes the world's most widely read rare coin market analysis each week in the pages of Coin World. He is also a lawyer and helps create estate plans for collections. Visit him online at http://www.steveroachonline.com, join him on LinkedIn at http://www.linkedin.com/in/stevenroach or follow him on twitter @roachdotsteve
Monday, August 30, 2010
We'd Rather Do It Than Write About It
When we first started to add a blog about appraising to our website, we were warned that we needed to continually keep the material fresh and posts updated on a regular basis. We were told if we didn’t do this - that we shouldn’t bother with a blog. For those of you that have read our blog, you know that our content is usually written for potential clients. Articles are written to explain why an appraisal is needed, what kinds of appraisals and formats are available and how one goes about finding the most qualified appraiser for the items that need to be appraised.
We write about appraising as a service to prospective clients and to find new collections to appraise. As appraisers, our passion and focus is really on the act of appraising and not on writing about it. We hope therefore, when there are lapses in our posts that we will be forgiven. There will be lapses from time to time as we get busy with lots of appraisal assignments. If you have been following our blog you have probably noticed there hasn’t been a fresh posting since early spring 2010. This is because we have been extremely busy appraising several major collections.
We love appraising truly fine art. As fine art appraisers, we completely submerge ourselves into our work. Appraising an individual’s collection is an opportunity for us to become as intimately involved with a fine art collection as a curator is with a museum collection. We see works by artists that we would never have the opportunity to see otherwise and that most of the world never sees. We get to know each work so well that we sometimes think about it as we walk our dogs and dream about it at night as we sleep.
Every collection we appraise and every artist we learn about as a result of each new assignment adds to our already vast store of collective knowledge. The experiences and insights we gain from working with our clients are a privilege. To us appraising is not really a job but a way of life. In our spare time we read about art, go to museums, attend classes, talk to other art historians, dealers, and other art professionals.
Appraising for us is “the icing on the cake” - writing about appraising is something we do while searching for the next great collection to get involved in and fall in love with. So please forgive us if our posts lapse from time to time. We’ll try to do better and make them more timely and informative in the future. In the meantime, if you have a collection you love, please call us and share it! Our website is www.fineartofappraising.com. Hope to hear from you.
Sincerely,
Christine Guernsey, ISA AM
Guernsey, Nelson and Kolker
Fine Art of Appraising
We write about appraising as a service to prospective clients and to find new collections to appraise. As appraisers, our passion and focus is really on the act of appraising and not on writing about it. We hope therefore, when there are lapses in our posts that we will be forgiven. There will be lapses from time to time as we get busy with lots of appraisal assignments. If you have been following our blog you have probably noticed there hasn’t been a fresh posting since early spring 2010. This is because we have been extremely busy appraising several major collections.
We love appraising truly fine art. As fine art appraisers, we completely submerge ourselves into our work. Appraising an individual’s collection is an opportunity for us to become as intimately involved with a fine art collection as a curator is with a museum collection. We see works by artists that we would never have the opportunity to see otherwise and that most of the world never sees. We get to know each work so well that we sometimes think about it as we walk our dogs and dream about it at night as we sleep.
Every collection we appraise and every artist we learn about as a result of each new assignment adds to our already vast store of collective knowledge. The experiences and insights we gain from working with our clients are a privilege. To us appraising is not really a job but a way of life. In our spare time we read about art, go to museums, attend classes, talk to other art historians, dealers, and other art professionals.
Appraising for us is “the icing on the cake” - writing about appraising is something we do while searching for the next great collection to get involved in and fall in love with. So please forgive us if our posts lapse from time to time. We’ll try to do better and make them more timely and informative in the future. In the meantime, if you have a collection you love, please call us and share it! Our website is www.fineartofappraising.com. Hope to hear from you.
Sincerely,
Christine Guernsey, ISA AM
Guernsey, Nelson and Kolker
Fine Art of Appraising
Tuesday, March 23, 2010
TASTE in ART?
Taste: Do you have it? Is yours good, bad, classic, contemporary, funky, in sync with today’s popular culture or intensely idiosyncratic?
Art appraisers know that art is not about good or bad taste, but that art appraisals are often all about taste – and not the individual appraiser’s particular affinity for one style or another. It’s the art market’s preference for particular styles at particular points in time.
Taste can get to be a thorny issue with clients. Too often their art education really begins with making a very common mistake: believing that art, especially art in their possession, will only appreciate in value.
My favorite client bought a very large and beautiful painting thirty years ago for more than $20,000. The artist was considered “hot” and his work was a perfect fit for the interior design of his newly built, then-very contemporary house. Both art and home referred to the Southwestern United States.
Over the years the client received updated appraisals from the gallery which sold him the work. These appraisals were for insurance coverage, and it the painting’s value seemed to grow until it more than doubled.
Recently this client built a new house in the large-scale Mediterranean-style popular now in this part of the country. That once-perfect painting no longer works in its new surroundings and my client would like to sell it. Unfortunately, there is no market for it, even at its original selling price. There is nothing wrong with this painting – it is in pristine condition, with a beautiful paint surface and impressive technique. It’s just out of fashion.
How can the art lover minimize the probability that he will purchase art that does not decline in value over the short run?
1. Be prepared to make mistakes; just try to make them early in your collecting career when the works you are buying are not so costly. That’s why it is so important to look, look and look some more before you purchase. As for buying expensive art on vacation in Hawaii, Santa Fe or some other exotic place – don’t hand over your MasterCard while you are still in a state of euphoria over being away from the office in a glamorous setting. Get photos from gallery, along with information on the artist. Go home, get back into your routine and see if you just miss that painting so much you can’t stand it. I’ll bet it will still be there.
2. Do not think that your financial and professional successes automatically make you bullet-proof when it comes to buying art, especially works being produced now. Working with an experienced art consultant or appraiser who knows the market could help you make a more informed decision on whether to purchase a work at a given price.
3. Your artwork will most likely go through an out-of-fashion period, and may not realize higher prices in the market until well after you have been laid to rest. Don’t take it personally. Your grandchildren may profit handsomely, if they don’t donate your collection to Goodwill before it has had time to become fashionable again. Fingers crossed.
Submitted by, Judy T. Nelson, ISA AM
for Guernsey, Nelson, Kolker and Associates
Art appraisers know that art is not about good or bad taste, but that art appraisals are often all about taste – and not the individual appraiser’s particular affinity for one style or another. It’s the art market’s preference for particular styles at particular points in time.
Taste can get to be a thorny issue with clients. Too often their art education really begins with making a very common mistake: believing that art, especially art in their possession, will only appreciate in value.
My favorite client bought a very large and beautiful painting thirty years ago for more than $20,000. The artist was considered “hot” and his work was a perfect fit for the interior design of his newly built, then-very contemporary house. Both art and home referred to the Southwestern United States.
Over the years the client received updated appraisals from the gallery which sold him the work. These appraisals were for insurance coverage, and it the painting’s value seemed to grow until it more than doubled.
Recently this client built a new house in the large-scale Mediterranean-style popular now in this part of the country. That once-perfect painting no longer works in its new surroundings and my client would like to sell it. Unfortunately, there is no market for it, even at its original selling price. There is nothing wrong with this painting – it is in pristine condition, with a beautiful paint surface and impressive technique. It’s just out of fashion.
How can the art lover minimize the probability that he will purchase art that does not decline in value over the short run?
1. Be prepared to make mistakes; just try to make them early in your collecting career when the works you are buying are not so costly. That’s why it is so important to look, look and look some more before you purchase. As for buying expensive art on vacation in Hawaii, Santa Fe or some other exotic place – don’t hand over your MasterCard while you are still in a state of euphoria over being away from the office in a glamorous setting. Get photos from gallery, along with information on the artist. Go home, get back into your routine and see if you just miss that painting so much you can’t stand it. I’ll bet it will still be there.
2. Do not think that your financial and professional successes automatically make you bullet-proof when it comes to buying art, especially works being produced now. Working with an experienced art consultant or appraiser who knows the market could help you make a more informed decision on whether to purchase a work at a given price.
3. Your artwork will most likely go through an out-of-fashion period, and may not realize higher prices in the market until well after you have been laid to rest. Don’t take it personally. Your grandchildren may profit handsomely, if they don’t donate your collection to Goodwill before it has had time to become fashionable again. Fingers crossed.
Submitted by, Judy T. Nelson, ISA AM
for Guernsey, Nelson, Kolker and Associates
Wednesday, March 17, 2010
“Royal Splendor in the Enlightenment: Charles IV of Spain, Patron and Collector”
A Glimpse into Unforgettable Worlds—A Study of Contrasts at the Meadows Museum, Dallas TX
March 7 – July 18, 2010
Reading the various articles announcing this exhibition, I thought the show primarily highlighted Goya and Lopez’s works commissioned by Charles IV as court painters. I was both disappointed and pleasantly surprised to find however, that the exhibition focuses on the grandiose life of Charles IV, with the majority of the paintings by Goya and Lopez on the other side of the museum in a small side gallery. Here was a king who lived in a grand fashion (like they always do),which here in America,we have no concept of. Splitting his time between four royal palaces coordinated to the seasons and to the Royal Palace in Madrid, Charles IV and his family experienced untold wealth. Highlighted in the exhibition are a myriad of objects which exemplify his plush lifestyle: exquisitely ornate desks, chairs, clocks, tapestries, paintings and even a hand carried gold and inlaid wooden carriage used by the Queen.
Contrast these decorative objects with the comparatively small paintings across the hall, where Goya’s work, created outside the realm of court painter, rest in a small alcove, along with some beautiful portraits by Lopez. It is no wonder these two men were chosen for their royal position.
How Dallas came to possess these paintings, along with other wonderful pieces (to name a few) by Velasquez, Murillo and Ribera is thanks to Algur H. Meadows, who began to collect Spanish art in the 1950s, and whose collection is one of the finest outside of Spain. The selection from the permanent collection on view is worth your time if you have it.
But I digress….I began this article with a mention of contrasts. As court painter, Goya produced the large portrait of Charles IV whose image is marketing the show, as well as two idyllic scenes cartoons) which were converted into tapestries.
On this side of the museum however, we witness another side of Goya’s life-the horrors of the French invasion, the darkness and brutality of prison life, the folly of man and a certain introspection which I believe resulted not only from going deaf in 1792 at the age of 46, but also from extended illness. I may be wrong on this, but I am not aware of any artist earlier than the 19th century who gives us such telling portraits of himself and whose views permeate each of his works, no matter who or what he is painting.
As an example,I grew up with a tiny reproduction of Goya’s portrait of the four year old Don Manuel Osorio de Manrique Zuniga, who was the son of Count and Countess of Altimara, painted c. 1788. This fair-skinned child stands innocently poised in a refined red costume bound with lace and satin, holding a string tied to a magpie, whose beak clutches a card bearing Goya’s name as the artist. Back in the looming darkness to the proper right of the boy crouch three cats, waiting for the right moment to pounce on the bird. To the proper left of the child is a bird cage filled with smaller birds that are at least for now, safe from the cats’ reach. The child’s name is written in a fine script across the bottom of the painting. The symbolic elements of this piece keep me coming back to it day after day. What message is Goya hiding within this official portrait? Innocence and vulnerability contrast with the “evil” eyes of the cats, and only a tiny string stands between them and their prey.
Dallas is lucky to have a number of Goya’s works, to include first edition sets of his four great print series: La Tauromaquia, Los Disparates, Los Caprichos and Los Desatres de la Guerra. Due to the fragile nature of prints however, these are not always on view. They may be examined by appointment if you are interested.
One of the small gems in this show, if I may call it that, is “Yard with Madmen”, 1794, a 16 7/8 x 12 3/8 inches, oil on tin. Based on what Goya actually witnessed in a Spanish prison, where the criminally insane were kept in shackles along with the other law breakers, the small dark scene arrests the senses-prison brutality reigns and there is little hope for a better tomorrow.
Contrast this record of Goya’s life with the portrait of Charles IV completed five years earlier, and you have a good idea of the juxtaposition of circumstances that this show presents. I have only brushed over a few pieces, and mulled over a few perspectives on the show. There are certainly many more for you to explore. I hope that you will visit this gem of an exhibition in Dallas. It’s worth the trip.
Submitted by Kim Kolker, ISA AM
for Guernsey, Nelson, Kolker and Associates, Fine Art Appraisals
The Fine Art of Appraising
Tuesday, March 9, 2010
Re-Discovered and Newly Authenticated Art
An art dealer I once worked for, told me one day that “all the really good old paintings have already been found, purchased and are hanging in museums or private collections somewhere. It is impossible for a dealer to find great paintings of known artists 19th century and older of any quality”. This statement was made before two really interesting re-discoveries and authentications were recently made; The Torment of Saint Anthony by Michelangelo, 1487-88, purchased by the Kimbell Art Museum, Fort Worth, Texas in 2009 and now a newly authenticated work by Vincent Van Gogh, Le Blute-Fin Mill, 1886, now on display in the Museum de Fundatie in the central Dutch town of Zwolle, Netherlands.
The Michelangelo painting was executed in oil and tempera on a wooden panel and believed to be one of only four easel paintings to come from Michelangelo’s hand. The truly amazing part of this discovery is that Michelangelo was only 12 or 13 years old when he painted it. Yes that’s correct….12 or 13 years old. The story behind the story is that young Michelangelo was granted access to prints and drawings in Domenico Ghirlandaio, his teacher’s studio. It was there that he discovered and was attracted to a 15th century engraving by German master Martin Schongauer, The Temptation of Saint Anthony. Using this engraving as an inspiration to try his hand at painting, young Michelangelo visited local fish markets, studying the fish scales and iridescent quality of the scales. The addition of these beautiful scales adds an original element to Michelangelo’s painting compared to the Schongauer’s engraving. Michelangelo’s painting is relatively small measuring 18 ½ x 13 ¼ inches.
The Michelangelo painting was sold at auction in London, July 2008 and then went under conservation and technical research at the Metropolitan Museum of Art, New York. The painting had been known to scholars for decades, but until its recent cleaning, the discolored varnishes and disfiguring overpaints prevented a full appreciation of the young Michelangelo’s masterful execution. After a brief showing at the Metropolitan Museum of Art in 2008, the painting was unveiled in its new home, the Kimbell Art Museum in the fall of 2009. Art patrons in the Dallas Fort Worth area were thrilled by the rediscovered Kimbell acquisition. If you haven’t seen it yet, and are in the area, a visit is a must and a treat!
Back in the 1970s, Vincent Van Gogh was all the rage amongst art history students. I was no exception, intrigued by his bright and often unnatural use of color, thick wild paint strokes and fascinatingly sad life story. Last week artdaily.org, a net art newspaper, reported on the most recent painting to be authenticated - a genuine Vincent Van Gogh. Le Blute-Fin Mill, a 19th century painting of a Paris mill, was declared an original Van Gogh, 25 years after the death of its collector Dirk Hannema. The Van Gogh was purchased by Hannema in 1975 from a Paris antique and art dealer for 5,000 Dutch guilders ($2,700). He then immediately insured it for 16 times what he paid for it. He was absolutely sure it was an original Van Gogh. His claims were discredited, however, because of earlier purchases of other “past masters” and claims which turned out to be forgeries.
The painting is atypical compared to Van Gogh’s more widely-known works such as his starry night paintings in rich dark blues and yellows and his crows over wheat field paintings. In contrast, the sky in this painting is very pale blue, almost ivory white and motionless. One can see hints of the typical Van Gogh stroke in the treatment of the women’s clothing as well as the strokes and almost rickety looking stairs and windmill, although the overall effect of the painting is still more sedate than what one usually thinks of with a Van Gogh painting. The colors in the women’s gowns are more typical of his works, especially the two women in the lower left hand corner of the canvas.
An interesting note about Dirk Hannema is that he was a brilliant art curator, being assigned as director of the Boijmans Museum in Rotterdam in 1921 when he was 26 years old. He collected high quality works by lesser known artists with a preference for works of old masters that were yet to be authenticated. He spent two years in jail just after WWII in 1945. During the war, before the Nazi occupation of the Netherlands, he had been given responsibility for all of the museums in the country. He was arrested and stood trial for being accused of aiding the illegal sale of several artworks to the Nazi’s which once belonged to the Koenigs Collection. He was never formally convicted and was later released. In 1958 he created an institute for his collection and was allowed to live in Nijenhuis Castle in the village of Heino on the condition that he allowed public access to the collection. Hannema personally gave guided tours by appointment until his death in 1984.
As an appraiser of fine art, an art historian and general lover of all arts, I am excited to know that “all the really good old paintings have already been found and purchased” is not necessarily true. I find it exceedingly hopeful that there is still a possibility of artworks just waiting to be discovered and re-discovered. I look forward to seeing them someday in museums where the masses can enjoy them.
Submitted by Christine Guernsey, ISA AM
For Guernsey, Nelson, Kolker and Associates, The Fine Art of Appraising
Monday, March 1, 2010
Insuring Your Art, A Sign of The Times
If there is one question I am asked more often other than "what kind of wood is this", it is what should I insure in the collection. Not being an expert in insurance I won't advise anyone on the types of coverage that can be purchased from a company. However, some thoughts may be helpful - especially as the insurers are evolving in their coverage of art.
Insurance is basically risk management on the part of the insured and the insurer. The Insured wants to minimize the potential loss of a valuable asset. The insurer wants to minimize their risk in having to provide to provide insurance coverage and maximize their profits for providing this service. In a perfect world this relationship can be a win-win situation. Unfortunately, more often than one might like the insured is either under insured, over insured, or not adequately protected with proper documentation of their assets.
Insurance is basically risk management on the part of the insured and the insurer. The Insured wants to minimize the potential loss of a valuable asset. The insurer wants to minimize their risk in having to provide to provide insurance coverage and maximize their profits for providing this service. In a perfect world this relationship can be a win-win situation. Unfortunately, more often than one might like the insured is either under insured, over insured, or not adequately protected with proper documentation of their assets.
Here are some basic thoughts:
* Photograph and document your collection, or at least the most valuable works in your collection. Include current appraisals, original sales receipts, and any additional paperwork that speaks directly to the value of your art.
* Buy as much insurance as you can comfortably afford, whether or not that amount covers the entire value of your art. Most loss, damage, or theft affects only a portion of a collection, not the entire collection. To repeat-- receiving some compensation is better than receiving no compensation at all. See the definition of terms at the end of this article.
* Make sure you understand your insurance policy. This means reading the fine print, and asking every question about every conceivable loss or damage situation that you can think of. You don't want to find out after a loss that you were not covered for that specific type of loss. Important questions should be asked and answered by written communications that you can file and retrieve later if necessary.
* Theft/damage insurance for art, added onto your home insurance, generally costs $1-$2 annually per $1000 of coverage (less if you have a good security system in place). Several insurance companies specialize in covering art and antiques exclusively. Coverage details can be discussed and/or negotiated with your insurance company. There's no excuse for not insuring an art collection. If you can afford the art, you can afford the insurance. And remember-- you don't have to insure for every last penny of value in your collection. Loss or damage rarely affects an entire collection, and you'll find that in the large majority of cases, even partial coverage will reimburse you for a substantial percentage of the dollar amount involved in most occurrences. Understand you risks and the most likely event you are insuring against. Are you in a flood plain, earthquake area, tornado prone state etc.?
Homeowner’s Insurance policy:
If one was to look at a home insurance declarations page, which is usually the first page in a home owner’s insurance policy, they would see Part I: Property Protection. This protection is usually broken down into four additional sections:A. DwellingB. Other StructuresC. Personal PropertyD. Loss of UseCoverage A. Dwelling typically covers your house, attached structures, fixtures in the house such as built-in appliances, plumbing, heating, permanently installed air conditioning systems, and electrical wiring.Coverage B. Other Structures typically covers detached structures such as garages, storage sheds, and fixtures attached to the land including fences, driveways, sidewalks, patios, and retaining walls. Detached structures used for business purposes are not covered under a personal home owner’s insurance policy.Coverage C. Personal Property typically covers personal property including the contents of your home and other personal items owned by you or family members who live with you. This protection can be based on actual cash value or replacement cost. Home insurance policies may provide limited coverage for small boats; however, most home insurance policies do not cover motorized vehicles unless they are unlicensed and used only at your home. Some items may have coverage limits such as firearms, artwork, business property, electronic data, jewelry, and money. Extra coverage is usually available by adding endorsements to your policy.Coverage D. Loss of Use typically covers living expenses over and above your normal living expenses if you cannot live in your home while repairs are being made or if you are denied access by government order.
Endorsements can also be added to your home owner insurance policy at an additional cost to provide extra protection. Examples of endorsements include:
1. Guaranteed replacement cost coverage will pay the cost to rebuild your home as long as you have met the requirements of your home insurance policy.2. Extended replacement cost coverage insures your home for a specific value and usually adds a 20-25% extended limit if reconstruction costs run over.3. Inflation Guard increases the amount of your home owner insurance to keep up with inflation so that you can maintain adequate coverage to replace your home in the event of a loss.4. Scheduled personal property protects articles such as jewelry, furs, stamps, coins, guns, computers, antiques, and other items that often exceed normal policy limits in your regular home owner’s insurance policy. It often provides coverage that is broader than the coverage in the home insurance policy. There normally is not a deductible for this coverage. Increased limits on money and securities provide additional coverage for money, bank notes, securities, and deeds.5. Secondary residence provides protection for a second home such as a summer residence.Theft coverage protection broadens the theft coverage to include personal contents in your motor vehicle, trailer or watercraft to be covered without proof of forcible entry.6. Credit card forgery and depositor's forgery coverage provides protection against loss, theft or unauthorized use of credit cards. It also covers forgery of any check, draft, or promissory note. No deductible applies to this endorsement.
Important: Check your policy. Some policies have limits of coverage under your homeowners by class of property. Some policies calculate your homeowners by a percentage of the total value of the house. For example your house is worth $200,000 and your contents policy is 50% or $100,000. If you have a piano that is worth $50,000 then all you have remaining is $50,000 for the rest of the contents. If your house burns down, you have a problem. It is also important to note that coverage on homeowners is usually a named peril. Not included unless scheduled separately would be your baby throwing your diamond ring into the running garbage disposal.
Check your policy for a co-insurance clause. If you have both a loss and this clause in your policy you may be disappointed in the final settlement by the insurance company. Basically this clause states that if your scheduled property is under-insured then if a loss occurs you will share the loss with the insurance company. The theory behind this is that you are self insured for the difference thereby limiting the liability on the part of the insurance company. If it has been some time since the insured has updated values, this is definitely a concern if a claim is made. On the flip side during economic downturns the only punishment for you the insured is that you may be paying premiums that do not reflect the true value of the property.
* Buy as much insurance as you can comfortably afford, whether or not that amount covers the entire value of your art. Most loss, damage, or theft affects only a portion of a collection, not the entire collection. To repeat-- receiving some compensation is better than receiving no compensation at all. See the definition of terms at the end of this article.
* Make sure you understand your insurance policy. This means reading the fine print, and asking every question about every conceivable loss or damage situation that you can think of. You don't want to find out after a loss that you were not covered for that specific type of loss. Important questions should be asked and answered by written communications that you can file and retrieve later if necessary.
* Theft/damage insurance for art, added onto your home insurance, generally costs $1-$2 annually per $1000 of coverage (less if you have a good security system in place). Several insurance companies specialize in covering art and antiques exclusively. Coverage details can be discussed and/or negotiated with your insurance company. There's no excuse for not insuring an art collection. If you can afford the art, you can afford the insurance. And remember-- you don't have to insure for every last penny of value in your collection. Loss or damage rarely affects an entire collection, and you'll find that in the large majority of cases, even partial coverage will reimburse you for a substantial percentage of the dollar amount involved in most occurrences. Understand you risks and the most likely event you are insuring against. Are you in a flood plain, earthquake area, tornado prone state etc.?
Homeowner’s Insurance policy:
If one was to look at a home insurance declarations page, which is usually the first page in a home owner’s insurance policy, they would see Part I: Property Protection. This protection is usually broken down into four additional sections:A. DwellingB. Other StructuresC. Personal PropertyD. Loss of UseCoverage A. Dwelling typically covers your house, attached structures, fixtures in the house such as built-in appliances, plumbing, heating, permanently installed air conditioning systems, and electrical wiring.Coverage B. Other Structures typically covers detached structures such as garages, storage sheds, and fixtures attached to the land including fences, driveways, sidewalks, patios, and retaining walls. Detached structures used for business purposes are not covered under a personal home owner’s insurance policy.Coverage C. Personal Property typically covers personal property including the contents of your home and other personal items owned by you or family members who live with you. This protection can be based on actual cash value or replacement cost. Home insurance policies may provide limited coverage for small boats; however, most home insurance policies do not cover motorized vehicles unless they are unlicensed and used only at your home. Some items may have coverage limits such as firearms, artwork, business property, electronic data, jewelry, and money. Extra coverage is usually available by adding endorsements to your policy.Coverage D. Loss of Use typically covers living expenses over and above your normal living expenses if you cannot live in your home while repairs are being made or if you are denied access by government order.
Endorsements can also be added to your home owner insurance policy at an additional cost to provide extra protection. Examples of endorsements include:
1. Guaranteed replacement cost coverage will pay the cost to rebuild your home as long as you have met the requirements of your home insurance policy.2. Extended replacement cost coverage insures your home for a specific value and usually adds a 20-25% extended limit if reconstruction costs run over.3. Inflation Guard increases the amount of your home owner insurance to keep up with inflation so that you can maintain adequate coverage to replace your home in the event of a loss.4. Scheduled personal property protects articles such as jewelry, furs, stamps, coins, guns, computers, antiques, and other items that often exceed normal policy limits in your regular home owner’s insurance policy. It often provides coverage that is broader than the coverage in the home insurance policy. There normally is not a deductible for this coverage. Increased limits on money and securities provide additional coverage for money, bank notes, securities, and deeds.5. Secondary residence provides protection for a second home such as a summer residence.Theft coverage protection broadens the theft coverage to include personal contents in your motor vehicle, trailer or watercraft to be covered without proof of forcible entry.6. Credit card forgery and depositor's forgery coverage provides protection against loss, theft or unauthorized use of credit cards. It also covers forgery of any check, draft, or promissory note. No deductible applies to this endorsement.
Important: Check your policy. Some policies have limits of coverage under your homeowners by class of property. Some policies calculate your homeowners by a percentage of the total value of the house. For example your house is worth $200,000 and your contents policy is 50% or $100,000. If you have a piano that is worth $50,000 then all you have remaining is $50,000 for the rest of the contents. If your house burns down, you have a problem. It is also important to note that coverage on homeowners is usually a named peril. Not included unless scheduled separately would be your baby throwing your diamond ring into the running garbage disposal.
Check your policy for a co-insurance clause. If you have both a loss and this clause in your policy you may be disappointed in the final settlement by the insurance company. Basically this clause states that if your scheduled property is under-insured then if a loss occurs you will share the loss with the insurance company. The theory behind this is that you are self insured for the difference thereby limiting the liability on the part of the insurance company. If it has been some time since the insured has updated values, this is definitely a concern if a claim is made. On the flip side during economic downturns the only punishment for you the insured is that you may be paying premiums that do not reflect the true value of the property.
Submitted by John Buxton, ISA CAPP
Shango Gallery, Dallas Texas
(For Guernsey and Associates, Fine Art Appraisals)
Meet our associate John Buxton:
Mr. Buxton has been in the antiques and appraisal business for more than 35 years as an recognized expert in African, pre-Columbian, South Pacific, and American Indian Art.
In 1990, he created the computer database, Auction Trak, for the appraisal, research, evaluation, and authentication of tribal art. A year later, he founded and incorporated Art Trak, Inc., an art services computer network. Buxton Appraisal, Authentication and Consulting Service was formed in 1996.
Mr. Buxton is a Certified Appraiser of Personal Property with the International Society of Appraisers, which is the largest personal property appraisal organization in the United States. Buxton is a past national director for the International Society of Appraisers and he is only the second appraiser with the organization and one of four appraisers nationally to qualify with a certification in African art.
Since 1974, Buxton has performed auction bidding for museums and collectors, and appraised, authenticated, and evaluated tribal art for private and institutional clients. Buxton has written, lectured and served as an expert witness as an appraiser and dealer in tribal arts. Buxton has been an appraiser with the PBS Antiques Roadshow since it first season in 1997. John Buxton writes for http://www.arttrak.blogspot.com/ .
In 1990, he created the computer database, Auction Trak, for the appraisal, research, evaluation, and authentication of tribal art. A year later, he founded and incorporated Art Trak, Inc., an art services computer network. Buxton Appraisal, Authentication and Consulting Service was formed in 1996.
Mr. Buxton is a Certified Appraiser of Personal Property with the International Society of Appraisers, which is the largest personal property appraisal organization in the United States. Buxton is a past national director for the International Society of Appraisers and he is only the second appraiser with the organization and one of four appraisers nationally to qualify with a certification in African art.
Since 1974, Buxton has performed auction bidding for museums and collectors, and appraised, authenticated, and evaluated tribal art for private and institutional clients. Buxton has written, lectured and served as an expert witness as an appraiser and dealer in tribal arts. Buxton has been an appraiser with the PBS Antiques Roadshow since it first season in 1997. John Buxton writes for http://www.arttrak.blogspot.com/ .
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