8. You’ve Collected It … Protect It

"Prudence is a presumption of the future, contracted from the experience of times past."
Thomas Hobbes

Some Points about Insuring Your Collection

Some day in the not-too-distant future you will take a long fond look at your collection and realize that you have quite a valuable assemblage. You will also recognize that it is there­fore subject to risk. But this is a cloud with a bright silver lining. It is a worry you can readily turn over to better worriers than you. Just call on an insurance company to protect you against fire, theft, damage, or breakage.

Today fine arts insurance is being written not only for museums and dealers, but for a great number of private collec­tors. Virtually any of the articles you have carefully selected can be so guarded. This includes pictures, sculpture, ceramics, books . . . and whatever is eligible for what the insurance companies term "articles of virtu." This mixture of Latin and English means only that the possession itself must possess definite artistic quality.

Occasionally there is some question as to exactly what is re­quired to endow an object with the nebulous quality which makes it worth more than its utility value. It means only that it will appeal to many people because of its beauty and that your evaluation is not based on sentimental attachment of a highly personal kind. If you have saved your grandfather's mustache cup because of your affection and respect for the esteemed gentleman, it will actually be worth no more than any mustache cup should you someday place it on the auction block.

The insurance companies also base their definition of "virtu" on how rare your painting or sculpture is, and on its possible historical significance. You can readily see that a letter from Benjamin Franklin is not only hard to come upon, but has importance because of the history behind it. It is only a scrap of paper in the purely pragmatic sense, but it will fetch a high price at an auction or a private sale.

The most important thing to do in insuring your collec­tion is to establish the value definitely when you take action to insure it. If you wait until a possible mishap occurs, many problems will pile up. The insurance company may insist on appraisals and here personal opinion may well influence the final decision. You could well find yourself out of pocket, as a result of not setting down the values at the outset.

I have already discussed the fact that one of the joys in col­lecting is the constant change and shifting about of the things that you buy through barter, exchange, or resale. Your own collection will probably undergo many metamorphoses. For this reason it is important that you make your listing with reasonable attention to detail, and that, as you acquire new pieces, you immediately advise your insurance company or broker. If you are insuring a painting, give the title, the artist, and any other information that would make the piece easy to identify. For example, in the case of a ceramic object, pro­vide color, size, type, age, and any other identifying facts. If you have pieces which are quite similar in appearance, make sure that you distinguish carefully between them so there will be no question about what was destroyed or damaged should the time ever come for you to claim a loss.

Make sure that the amount of insurance you have written for you represents the value fairly. Remember that, while insurance companies welcome fine arts policies, their business success depends on their paying only legitimate claims. If you exaggerate, you are sure to run into unpleasant difficulties. I have discovered that whenever I have had a claim, the in­surance agents were co-operative, pleasant, and scrupulously fair in all their dealings.

After you call your agent, try to be as critical as if you were deciding which print you want to take home with you. Some agents will offer you three or four different types of policies for this insurance and expect you to make the choice. You can do this if you are clear and specific on the "risks" you want to guard against. Fire, breakage, packing damage, robbery—these are hazards you face. Make a list of a dozen more—all you can think of. Then tell the agent you want protection against all of them and any more he may suggest. When you have cata­logued your risks, ask the agent which policy protects them all. Chances are he will steer you then to the fine arts policy, per­haps with one or two endorsements to cover particular addi­tional risks you have in your list. This way you will get a policy which is virtually written for your particular collection. There are other insurance policies which may be applied to collections, such as the Personal Property Floater, the Personal Articles Floater, or your regular fire policy. These can be use­ful if you want to protect only one or two fine arts items. You merely specify the special item or items, and the policy covers them for a slight increase in premium. The drawback is that these policies are intended, really, to cover a different set of risks than those which are peculiar to a fine arts collection. So you are buying protection which fits your house fine but which leaves some of the risks on your pictures uncovered. When you have enough pieces to call them a "collection," you are ready for the specialized protection you can get in a fine arts policy.

Incidentally, I might point out that if you have any valuable rugs or antiques in your home you can include them in your fine arts coverage. Much to my regret, I failed to list a beauti­ful Chinese rug which my wife had inherited. This rug was sent out for cleaning. The establishment to which it was as­signed had a disastrous fire. We lost the rug and, because it was not on my schedule of fine arts possessions, I had quite a few problems in recovering its worth.

You will find that the general coverage which you can obtain for your art collection is the same as that given to precious jewelry and furs. Thus it offers protection "against all risks of loss of/or damage to/such property with the exception of certain exclusions." These exclusions are only four in number. First of the risks for which you cannot obtain insurance is war damage. You will find that today this same exclusion is prev­alent on most other insurance policies, as well as on fine arts coverage. The reason for such a clause is too obvious to allow comment.

The second exception excuses the insurance company for "wear and tear, gradual deterioration, moths, vermin, inher­ent vice, or damage to, stain to or resulting from any repairing restoration or retouching process." As you well know, the pass­ing of time can harm virtually any work of art, and collectors call on experts who can carefully retouch and repair any such damage. In addition, your insurance company believes that people to whom you assign such repairs or retouching should be responsible for the results of their work, and so you will find that should a retoucher damage your canvas, you will not be able to collect from the insurance company. However, you will be pleased to discover that your insurance coverage follows your possessions, so that if an accident occurs, in the retoucher's studio as an example, you will be compensated for any loss. Several years ago, a valuable Tintoretto from the Kress Foundation was burned when a fire hit the studio of a restorer working on the valuable canvas. The Foundation's insurance made up the loss.

Since the insurance does follow your paintings and sculpture, it is usually safe to send them out to exhibits. In case of any accident you have adequate protection. But keep this in mind: you do not have automatic coverage if you send your collection to a fair ground or any national or international exposition. Should your paintings merit exhibition under such auspices, you must make special arrangements with your insurance com­panies. I am sure you will see the reasons for this precaution. First of all, many fair grounds and exposition grounds are subject to severe fire and conflagration hazards. Since, as I have already pointed out, the insurance companies are essen­tially businessmen, they feel they cannot afford to risk extra fire hazards until they first check the location, and if need be, ask for an extra premium. The second reason for this "exclu­sion" is the possibility that any exposition might well have a large concentration of art works, all insured. Therefore, the insurance company must guard against the possibility that ten or even more of its customers would have their work on view at the same large exhibition. It feels the necessity of checking over such a location to see that it is not exposed to the possibil­ity of greater loss than the reinsurance will allow.

I am now beginning to feel more like a careful businessman than a collector, but there are still a few minor, yet essential, points that might serve to protect you as your collection grows. First, let me point out that the usual fine arts policy contains what is known as a "pairs and sets" clause. Let us see how this works. Perhaps you have a valuable old chess set and one morning you discover that the queen and two bishops are miss­ing. The insurance company will pay you the full amount of the value you have placed on this chess set in your schedule. And you agree to give the insurance company the rest of the chess set in return. You can see why this clause is put into your policy. Should there be a cleavage of opinion about how much the queen and two bishops are worth, a great deal of haggling and bickering could well ensue. Since the company has agreed to pay the full amount of the value which you have set forth, nothing is left to judgment or negotiation. You get your money. They take what is left.

When you buy new paintings, sculpture, or other objects, they are covered automatically by your insurance company the minute you complete the purchase. But you are required to give a report on your new acquisitions within 90 days from the time that you acquired them. Naturally, you would also pay a prorata addition to the premium, starting on the day of your purchase. Here is a warning: your policy does not cover your newly purchased items unless you report them within the 90-day period.

Be very careful about packing and crating any of your valu­ables if you expect a return from your insurance in the case of damage or loss. You know that many fine objects must be wrapped in coverings that keep out dampness. You know how easily a canvas can be destroyed by a carelessly driven nail. You yourself know what dangers will confront your own particular specialty. Because of the many problems which arise when you ship valuable parts of your collection, the in­surance company puts in the following disclaimer: "It is war­ranted by the insured that the property insured hereunder, shall be packed and unpacked by competent packers." Since I have a lump in my throat when movers trundle iron bed­steads from the children's room, I can quickly see the insurance company's wisdom when they insist on this special provision. If you ship your collection, see that it is shipshape, and put it in good hands.

You will discover that the rates for a fine arts policy are really quite reasonable. They are based on "loadings," added to the basic cost of your ordinary household fire insurance. Such loadings range from 4$ for every $100 of value for the first $10,000 worth and slide all the way down to $.013 per $100 for $75,000 worth of insurance. However, if you live in an area such as the Gulf States, where there are frequent and severe wind storms, your policy does not cover the hazard of tor­nadoes and other heavy blows unless you pay an additional premium as required by the underwriter.

If you wonder why the rates have been kept so reasonable, you have only to think of your collector's instincts to discover the reason. Your fine arts policy covers the full value of your property whereas most household insurance policies are written for only a fraction of their total value. If a fire should occur, I am quite confident you will save your DeKooning before you carry out Cousin Julia's favorite rocker.

Since we have devoted time, energy, and a complete chapter to protecting your investment in the fine arts, it might be a fine idea to take another look at the investment aspect of your collecting passion . . . without regard to such hazards as fire, flood, theft, or man (and "maid"!) inflicted damage. Our sub­ject, to be carefully explored in the following chapter: How your investment in the arts is destined to fare in the years just ahead.

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