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There are different risks associated with valuable art collections and it is important to make sure that you have the correct insurance cover, according to an industry expert.
Speaking to Fin24, Christelle Colman, managing director of Elite Risk Acceptances – a subsidiary of Old Mutual Insure, explained why it is important to get specialist cover for a valuable art collection.
Colman stressed that often people are disappointed to find that the insurance cover they have for their art collection is not adequate. She encouraged individuals to get a broker to help determine which insurance cover would be most comprehensive.
"Something as meaningful as a personal art collection should not be overlooked when it comes to insurance and insuring the piece for the correct value and cover options, taking all the unique factors such as the valuation of the artwork as well as the potential appreciation into account," she said.
Colman shared five reasons why individuals should get specialist cover:
1. Appreciating value
The value of the artwork could appreciate "dramatically", Colman said. For example, household contents would usually appreciate above inflation rate - for example between 7% and 10%, but art appreciates much more.
2. Death of an artist
Upon the death of the artist, the value of the artwork will also appreciate in value and the insurance cover should be adjusted for that appreciation.
3. Commissioned pieces
Sometimes individuals commission an art piece. In the case that there is a theft or damage to the artwork before it is completed, you need to have insurance cover to recover the deposit put down for the commissioned piece, explained Colman.
4. Rand exchange rate
Artwork value is subject to the rand-exchange rate, she explained. Insurance cover is needed in the case of the depreciation in the rand exchange rate.
5. Transit
Often pieces need to be transported from studios or galleries to the individual's property and specialist cover is needed for the risk associated with the transit.
Colman encouraged individuals to do their research, either through a broker or even Google searches to compare different insurance offerings, to make sure they will get the cover they need.
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