Picasso raffle competition highlights importance of valuations
A new competition allows people to purchase a raffle ticket of £135, for the opportunity to win an original Picasso painting. Like any newly purchased valuable artwork, the winner must conduct a proper valuation to ensure it can be insured for its appropriate replacement value.
The original Picasso painting, titled ‘The Man with the Opera Hat’, a cubist drawing from 1914, is currently on show at PAD London Art Fair and will be awarded on the 18th of December 2014.
According to Christelle Fourie, Managing Director of MUA Insurance Acceptances, it is essential for anyone who has just bought (or won) artwork to ensure that they have a professional valuation conducted immediately to ensure the artwork is covered for the correct replacement value in the event of loss, theft or damage.
"Consumers should speak to their broker to find out how to obtain a valuation from a reputable art dealer or a specialist antique valuator. A properly documented inventory of items and up-to-date valuation certificates are the most important assets when filing a claim for valuables such as artwork, as in most cases these certificates are almost always a requirement by insurers at the time of a loss.”
She says it is also important to make sure that artworks are insured by a specialist insurer, as there are a number of special extensions that may be added to the insurance policy. "A specialist insurer can provide additional coverage, for example, for the appreciation in the value of the artwork in the event of the death of the artist, where the sum insured is automatically increased by 150% in the year following the death.”
An important factor for consumers to consider is choosing a reputable insurer with the required reinsurance capacity and financial security to insure valuable artworks, says Fourie. "It is also vital that the insurance provider has the correct level of expertise to handle the more complex issues associated with claims for fine arts.”
She says it imperative that consumers consider whether they would intend to replace the artwork in the event of loss when taking out insurance. "Some people have no intention of replacing certain valuables, especially those that have been inherited, as the true value is of sentimental nature. In these cases it is important to determine the correct replacement value and specifically agree with the insurer to either cover the items for a lower amount on an agreed value basis or to exclude the items altogether.”
The benefit of insuring items on an agreed value basis or first loss value is the insured can then decide to replace the item with something more modern and useful, or not at all, says Fourie. "By not specifying this directly with the insurer, they can be placed at risk of substantial underinsurance on the contents value by not including it in the overall sum insured.”
Fourie says that for high net worth consumers in particular, there are some common mistakes such as forgetting to take into account the impact of the fluctuation of the Rand and the impact this may have on insurance replacement costs for valuable artworks purchased overseas.
"By ensuring that one possesses regularly updated valuation certificates of artworks, as this is most often a requirement by insurers at the time of a loss, not only will the owner be informed of the actual value of the artwork but they can also avoid any financial losses by insuring it for the correct replacement value,” concludes Fourie.
Some additional tips for protecting artworks:
• It is a good idea to install smoke detectors in rooms containing valuable artworks.
• Avoid placing artworks in direct sunlight as this can result in severe and often irreversible damage.
• Do not hang artwork over a fireplace as the heat, smoke and ash can ruin the piece.
• It is best to hire a professional art hanger to ensure good support and reduce the chance of the artwork falling.
• Storing fine art in a basement or attic is not a good idea as these parts of the home are most susceptible to dramatic temperature changes, flooding and leaks. Rather store unused artworks in a specially created "art closet," with horizontal racks and a locked door and wrap all fine items in archival materials, taking care to store framed artwork face to back, in a vertical position.
• Only use "museum quality” materials to frame artworks, especially paper, textiles and photographs and use shatter-resistant fronts that help shield damaging UV rays and other exposures, while corrugated polypropylene backings protect against water-absorption.
