Significant problems found with current appraisals
An appraisal is a record of an item to prove its existence, establish its identity and communicate a value through an established methodology.
In reviewing a number of artwork and collectible appraisals for various insurance companies across the country, the vast majority (85%) lacked the information needed to identify the work should there be a loss. Identification is, at least as important, if not more important than the value. Without proper and complete identification, value conclusions can be skewed. I’m not just talking about identifying the artist and “title” of a piece; I’m talking about the physical description and content of the piece. Can you recreate an image of what the piece is or more often, was, from the description? Size, support, medium, genre, content and colour are all significant in correct identification and valuation.
The insurance company exposure on improperly insured artwork, collectibles and jewelry is significant. Thousands to hundreds of thousands of dollars can be lost on one claim. Insurance companies need to know what they are insuring in order for actuary to properly price their product. This starts with underwriting understanding the need for proper identification of this type of property. Underwriting guidelines usually indicate only when an appraisal is required (if an item is valued over $5,000). When dealing with artwork and collectibles to jewelry, specific requirements as to appraisal content should also be included in the guidelines. By doing this, it would also assist the claims staff in their investigation, settlement and possible recovery of missing or stolen items.
Emerald Art Services provides consulting and appraisal services to insurance companies and private clients across the country. Visit WWW.EMERALDARTSERVICES.COM for additional details.