As Art Collections Grow in Canada, XL Group Encourages Updating Appraisals to Assure Best Value Protection
TORONTO, Jan. 23, 2013 /CNW/ - As more Canadians look to invest in art -- sending art prices skyrocketing -- collectors need to boost their risk management efforts to assure the true value of their collections are properly protected, says XL Group plc's Fine Art and Specie insurance team.
"Art is increasingly recognized as an asset class," says Anton Antonov, Fine Art Underwriter for XL Group in Toronto. "In fact, according to research published by Mei Moses and other art index providers, art outperformed other equities in all periods between 2000 and 2011. Such performance was evident in recent auctions in Vancouver and Calgary which fetched prices that were double or triple of pre-auction estimates."
"Art losses from Superstorm Sandy offer a stark reminder that, especially as art values climb, collectors need to make sure their artworks are properly assessed in order to properly protect them. After all, a basic homeowner's insurance policy typically only covers up to $6,000 in valuables which may leave owned artwork largely uninsured." says Mr. Antonov. "Many serious collectors already rely on all-risk fine art policies to protect their collection from a wide-range of risks such as damage that could occur in shipping or transporting a piece – if they loan an artwork to a museum, for example -- or from a storm or smoke."
"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," says Mr. Antonov. "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 Mr. 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.
Mr. 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, says Mr. 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.
"Protecting the value of artwork relies heavily on having a thorough assessment every few years and working with qualified appraisers and insurers to gain the best protection," notes Mr. Antonov,
About XL's Insurance Operations
XL Group plc's insurance companies offer property, casualty, professional and specialty insurance products globally. Businesses that are moving the world forward choose XL as their partner. To learn more, visit www.xlgroup.com/insurance XL Group is the global brand used by XL Group plc's insurance subsidiaries.
In Canada, XL Group's Fine Art coverage is provided by the Canadian branch of XL Insurance Company Limited.
About XL Group plc
XL Group plc, through its subsidiaries, is a global insurance and reinsurance company providing property, casualty and specialty products to industrial, commercial and professional firms, insurance companies and other enterprises throughout the world. XL is the company clients look to for answers to their most complex risks and to help move their world forward. Its principal offices are located at No.1 Hatch Street Upper, 4th Floor, Dublin 2, Ireland. To learn more, visit www.xlgroup.com
SOURCE: XL GroupFor further information:
Christine Weirsky, Media Relations, +1-610-968-9395