Collection Insurance: Why You Need It and How It Works?

Why Insure Art and Antiques?

For many, collecting is not just a hobby, but a serious capital investment. Paintings, sculptures, antique furniture, and other valuable items are expensive assets, the loss of which can cause significant financial damage. A standard home or apartment insurance policy typically does not cover the full value of such objects.

Standard property insurance policies have strict payout limits for valuables and cover only a limited list of risks. Therefore, to reliably protect a collection, a specialized insurance product is needed that takes into account all the nuances associated with the storage, transportation, and exhibition of works of art and antiques.

Specialized Policy vs. Standard Property Insurance

Parameter	Standard Property Insurance	Specialized Policy for Collections
Payout Limits	Low, often with a general limit for valuables	Based on the agreed value of each item
Risk Coverage	Standard set (fire, theft, flooding)	Expanded list, including accidental damage, risks during transit and at exhibitions
Valuation	Based on receipts or market price, accounting for wear and tear	Based on an independent expert appraisal (agreed value)
Coverage Area	Usually only at the residential address	Worldwide ("all-risks" coverage)

The main difference of a specialized policy for collections lies in its approach to valuation and risk coverage. While standard insurance treats valuables as part of general property with an averaged value, art insurance approaches each item individually.

This approach ensures that in the event of loss or damage, the owner will receive compensation corresponding to the real market or agreed value of the item, not a token amount within a general limit. The differences between the two types of policies are quite significant.

Choosing a specialized policy provides comprehensive protection that considers the specific nature of valuable collection items.

Specialized policy vs. standard property insurance

How is a Collection Appraised for an Insurance Company?

The basis of any insurance contract for antiques and art is an accurate and professional appraisal. Without it, it is impossible to determine an adequate insured amount and, consequently, calculate the policy's cost. The appraisal process is a structured procedure consisting of several key stages.

For the insurance company, it is crucial to obtain an objective valuation for each item. This document, prepared by an accredited expert, becomes an integral part of the insurance contract. The appraisal procedure typically includes the following steps:

Creating an inventory. The collection owner compiles a complete list of items to be insured, with their detailed descriptions, photographs, and existing documentation (receipts, certificates, provenance).

Selecting an appraiser. The insurance company may suggest its own expert or accept the report of an independent appraiser who has the appropriate qualifications and reputation in the field.

Conducting the appraisal. The specialist inspects each item, analyzing its authenticity, authorship, era of creation, materials, condition, and ownership history.

Generating the report. Based on the appraisal results, an official report is prepared, which specifies the agreed insurance value for each object. This value is fixed in the contract and is not subject to revision when an insured event occurs (unlike market value).

Regular reappraisal of the collection (every 3-5 years) helps keep the insured amount in line with the current market situation.

What Risks Does the Policy Cover and How Much Does It Cost?

Specialized policies typically operate on an "all risks" basis, which means they cover any accidental physical damage or loss, except for cases specifically excluded in the contract (e.g., natural wear and tear, damage from insects, or acts of war).

This broad coverage is a key advantage of art insurance. The main risks covered by the policy include:

Theft, robbery, vandalism.
Fire, explosion, lightning strike.
Water damage resulting from accidents in plumbing, heating, or sewage systems.
Accidental damage (e.g., an item falling while being moved).
Damage during transportation, including loading and unloading.
Damage while on exhibition, at a restorer's workshop, or in storage with a third party.

The cost of insuring a collection directly depends on its total appraised value and a number of other factors. On average, the annual insurance rate ranges from 0.2% to 1.5% of the total insured amount. The price is influenced by storage conditions (presence of alarms, safes, fire suppression systems), frequency of transport, and the geography of exhibitions.