LW called while her friend’s house in the Palisades still smoldered. She asked this important homeowner’s insurance question: “Elizabeth, W didn’t have an appraisal for his contemporary lithography and modern art collection. He assumed the artwork was insured under the fine art category in his general homeowner’s policy. W seems to recall the aggregate total coverage for fine art is $60,000, but the art isn’t itemized. He didn’t request a separate fine art rider coverage for which he needed an appraisal to create an itemized schedule of the art. Now the artwork is gone. Should he hire you—an appraiser—now?”
Top ten factors raised from this one very timely question indeed:
- W must understand his policy. I gave LW the name of a great insurance attorney who used me for years in fire cases if W needs help reading the fine print. The two types of personal property are appreciable and depreciable. Generally, art is appreciable, furniture depreciable. But my collectors of fine vintage furniture do NOT consider their Eames Chair depreciable. What kind of coverage does W have? Market value typically refers to actual cash value, not replacement cost. The difference can be vast. Think of the value of a high end five year-old TV (market value) versus the replacement of that same TV at the cost of a 2025 model. Finding sales in the right market is important, I give you a few tips on market research below.
- An appraisal after a loss might become helpful (read on…). However, since W invested in blanket coverage for $60k of art, to itemize the artwork only helps up to the aggregate market value of $60k. Once he reaches that limit in terms of market value, he needs a certified appraiser to itemize art and set values if he plans on claiming anything over the aggregate amount. This effort may be too late.
- Since the collection burned, to make a claim W will need to prove ownership and the former location of the art, including the collectible furniture in the home. Social media provides ways to prove ownership. Surprisingly many photos on social media show a work of art in the background. Look for shots of interiors “behind” family, dogs, or friends.
- W might want to research market value of works of art on websites that list completed SALES at auction. I find comparable sales from PAST sales, not the offered price, the “would you take it” price. Some websites I use:
- P4a: antiques, decorative art, fine art
- Askart: American artists SOLD prices
- Artprice: great for European works, SOLD prices
- Mutualart: good for the modern/contemporary art market; this website reports on artworks SOLD (consummated prices paid) but they also carry dealer’s offers to sell
- Artnet: a full-service site for decorative art and fine art SOLD
- Worthpoint
- Although in most cases a valuation is based on prices PAID in the market, insurance companies also accept offered prices as comparable research, but they depreciate those prices. Use these two ways to research comparable furniture or fine art. Gather sales based on an auction or gallery result, or find three or more fairly consistent OFFERED prices in the market.
- Before W hires me and pays out of pocket, insurers may hire an appraiser if stated in the “appraisal clause” in the policy. Later W might hire his own appraiser if he disagrees with the insurance company’s adjustor or appraiser. However, if they don’t reach an agreement, a third appraiser is hired as an umpire. It might drag on forever and become expensive. Since he didn’t obtain scheduled rider coverage, this may become a moot point. Art values weren’t set forth so values can’t be argued over. But the furniture is another story, as one might argue that designer furniture from the 1960s is appreciable….
- Professional appraisers becomes helpful before a loss for the itemization and documentation needed for rider or scheduled coverage. I might spur W’s memory of objects in his lost home. Because I’ve seen thousands of households and collections of art, or furniture, silver, glass, musical instruments, porcelain, books, or toys, I often regain a memory. After a loss, I’m often hired by law firms to ‘find’ objects of value a client forgot. For example, if you collect Chagall you might also collect Dali prints. For much of my “fire victim” work I provide a conversation space from which I “see” the interior of an imagined room or fine collection. Conversations sound like this: “Oh, you had your grandmother’s tiny diamond cocktail watch, your mom’s Bulova, you dad’s Rolex—did you also have your grandfather’s gold pocket watch?” I’m well-versed in the associative rebuilding of a lost collection or living space.
- A prominent attorney who works on client losses in the Eaton Fire tells me some insurance attorneys representing claims of the mega-wealthy will act as a ‘public adjustor’ for $10% of the claim’s settlement, a clever way to capitalize on how bewildering insurance losses can be…
- Your best method of proving ownership and location is to do two things with your phone this weekend. Have someone film a video of YOU going through your home and narrating what you know about each items of importance. “Importance” might mean of family relevance, or an object over $1,000 or BOTH. This proves location and ownership, and provides a record for heirs as well. Second, take STILL photos of the objects you’d HATE to lose. People can manipulated still photos in a way a video cannot; a skilled researcher can find MUCH information with a good zoom. MAKE COPIES OF BOTH VERSIONS. This matters far more than a collection of receipts.
- A simple thing nobody does is raise art off the floor of a closet! In fighting a fire or in a flood, objects close to the floor will get soaked.
If you have questions email me or call (805) 895-5005.