Having an updated appraisal done will ensure your artwork is properly protected
Do you have fine art in your home or are thinking of buying art? Having an up-to-date appraisal done on your art collection will not only ensure you are properly covered for insurance but will also determine fair market value on your artwork.
A recent statement released by the XL Insurance Company Ltd. confirms that “Canadians who are buying art, whether as decoration or as an investment, need to boost their risk management efforts to ensure that the true value of their collections are properly protected”. “The key to assuring the right cover and policy limits however rests on having an up-to-date value assessment of the collection and that requires working with a qualified professional art appraiser,” Anton Antonov, Fine Art Underwriter for XL Group in Toronto. “An appraisal is used to determine the appropriate replacement value, most commonly at retail, of an artwork or to determine a price for damage to a piece.”
“The key to assuring the right cover and policy limits however rests on having an up-to-date value assessment of the collection and that requires working with a qualified professional art appraiser,” Anton Antonov, Fine Art Underwriter for XL Group in Toronto. “An appraisal is used to determine the appropriate replacement value, most commonly at retail, of an artwork or to determine a price for damage to a piece.”
But Antonov acknowledges that appraisals are valuable for more than just insurance coverage. They determine Fair Market Value to assist in:
- Establishing equitable distribution of property that is jointly owned by individuals or institutions.
- Determining an art donor’s income tax deduction if art is given as a charitable donation.
- Proving the value of an object in anticipation of a potential sale or to determine the value of an object under consideration for purchase.
- Verifying preparation of estate tax returns, assisting in estate planning or aiding in the distribution of assets.
- Helping with asset management, loan collateral and related financial and legal matters that can be tied to an art collection.
Antonov recommends hiring an appraiser who is knowledgeable about the object and class of your particular collection and certified by a nationally recognized organization. To find the right one, he suggests asking the right questions:
- What are your qualifications and/or credentials? The Certified Appraiser of Personal Property designation (CAPP) and the International Society of Appraisers (ISA) are the most recognized professional designations.
- What is your experience in evaluating this particular item or collection? Look for an appraiser who is a specialist in the type of items being evaluated.
- Do you have a vested interest in the items being appraised? Appraisers should not be involved in the purchase or sale of an item or similar items being evaluated, including any present or prospective interest in the objects in the collection.
- What are your costs? Costs can include a charge per item appraised basis or a per-hour-of-work approach. Ask for a written cost estimate, cautioned Antonov.
- What will you deliver at the end of the appraisal? Ask for a sample of the final report or a description of what it will contain.
For more information on fine art coverage and appraiser recommendations please contact us.
The full article is available here.