It would be insufficient to discuss the art market without examining the areas that, although essential, are peripheral to said market. In practice, these areas require as much of the amateur’s attention as buying and selling, in order to enable the amateur to protect his finances.

insurance

preservation and restoration

prevention

framing

Insurance

Although it is not very poetic, this is how things work in practice: a work of art is in principal considered as a ‘piece of furniture’ in the legal sense of the term, as opposed to the buildings that contain them. As such, its protection coverage will be governed by the ‘content’ component of the ‘comprehensive dwelling’ insurance. Certain pieces of furniture, in the general sense of the term, may, however, be considered by certain laws as buildings ‘due to intended use’ or ‘by incorporation’ as soon as they are integrated in the building: if you dwelling includes panelling from the Louis XV period, with painted pillars, stained glass windows or monumental decorations, you should be attentive to this distinction, if applicable.

The risks covered by ‘comprehensive dwelling’ insurance are primarily damages resulting from fire, storm, hail and flood damage. Theft coverage is very often available as an option. In terms of theft, standard contracts often provide for a ceiling per object, while stipulating that the calculation of compensation will be based on its market value. Specifically, if something bad happens to one of your works of art, you will never receive more than this ceiling, even though your object may be worth twice this ceiling. In addition, as is the case for other risks, the object will be valued based on its market value (what price could I obtain on the current market?), rather than on its reconstitution value (what price would I have to pay to procure the same object?). The nuance is significant and the loss is sometimes considerable. In general, it is important to know that the market value represents roughly 50% of the replacement value, because taxes and the profit margin will be deducted. In order to avoid an unpleasant surprise, it is therefore better to take out a different type of insurance.

Owners of works of art whose value exceeds the limit stipulated by the ‘comprehensive dwelling’ insurance contract must take out a guarantee extension on the basis of an ‘agreed’ value, which means that you are aware as per completion of the contract of the amount which will serve as a basis for the compensation. Furthermore, in this case, the insured and insurers decide to insure the object based on the reconstitution value, rather than on the market value. In order to determine this replacement value, the assistance of an expert, whose fees are paid by the insured, will often be necessary. One should always be attentive to the fact that if your contract does not mention the validity period of the agreed value, the latter may be revised, upwards or downward, based on the market at the time of the claim.

This type of insurance may be taken out on one or more objects, as well as on an entire portfolio. Unlike standard insurance, which only covers risks expressly mentioned, ‘all risks’ insurance, as its name indicates, has the advantage of covering all risks (theft, loss, and damage), except those risks that are expressly excluded. As this premium is set on a case-by-case basis, it is difficult to give accurate rates here. In any case, this will require the assistance of an expert, whose fees will also be borne by the policyholder. It goes without saying that the expert will propose a reconstitution value valuation.

Insurers are not keen on ‘all risks’ insurance. Many of them only offer it in the case of existing trustworthy business relations (other contracts taken out). To protect themselves, insurers often impose strict protection measures (requiring the insured to place his stamp collection in a vault if he is not on the premises, etc.). In order to discourage fraud, insurers also sometimes require an obligatory reconstitution of the object in question (jewellery purchase, for example), and the compensation is paid directly to the seller of the replacement object. Finally, insurers only agree to cover ‘reasonable’ values. In the case of very valuable objects, it is necessary to contact a specialised firm.



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		It would be insufficient to discuss the art market without examining the areas that, although essential, are peripheral to said market. In practice, these areas require as much of the amateur’s attention as buying and selling, in order to enable the amateur to protect his finances. insurance preservation and restoration prevention framing Insurance Although it is not very poetic, this is how things work in practice: a work of art is in principal considered as a ‘piece of furniture’ in the legal sense of the term, as opposed to the buildings that contain them. As such, its protection coverage will be governed by the ‘content’ component of the ‘comprehensive dwelling’ insurance. Certain pieces of furniture, in the general sense of the term, may, however, be considered by certain laws as buildings ‘due to intended use’ or ‘by incorporation’ as soon as they are integrated in the building: if you dwelling includes panelling from the Louis XV period, with painted pillars, stained glass windows or monumental decorations, you should be attentive to this distinction, if applicable. The risks covered by ‘comprehensive dwelling’ insurance are primarily damages resulting from fire, storm, hail and flood damage. Theft coverage is very often available as an option. In terms of theft, standard contracts often provide for a ceiling per object, while stipulating that the calculation of compensation will be based on its market value. Specifically, if something bad happens to one of your works of art, you will never receive more than this ceiling, even though your object may be worth twice this ceiling. In addition, as is the case for other risks, the object will be valued based on its market value (what price could I obtain on the current market?), rather than on its reconstitution value (what price would I have to pay to procure the same object?). The nuance is significant and the loss is sometimes considerable. In general, it is important to know that the market value represents roughly 50% of the replacement value, because taxes and the profit margin will be deducted. In order to avoid an unpleasant surprise, it is therefore better to take out a different type of insurance. Owners of works of art whose value exceeds the limit stipulated by the ‘comprehensive dwelling’ insurance contract must take out a guarantee extension on the basis of an ‘agreed’ value, which means that you are aware as per completion of the contract of the amount which will serve as a basis for the compensation. Furthermore, in this case, the insured and insurers decide to insure the object based on the reconstitution value, rather than on the market value. In order to determine this replacement value, the assistance of an expert, whose fees are paid by the insured, will often be necessary. One should always be attentive to the fact that if your contract does not mention the validity period of the agreed value, the latter may be revised, upwards or downward, based on the market at the time of the claim. This type of insurance may be taken out on one or more objects, as well as on an entire portfolio. Unlike standard insurance, which only covers risks expressly mentioned, ‘all risks’ insurance, as its name indicates, has the advantage of covering all risks (theft, loss, and damage), except those risks that are expressly excluded. As this premium is set on a case-by-case basis, it is difficult to give accurate rates here. In any case, this will require the assistance of an expert, whose fees will also be borne by the policyholder. It goes without saying that the expert will propose a reconstitution value valuation. Insurers are not keen on ‘all risks’ insurance. Many of them only offer it in the case of existing trustworthy business relations (other contracts taken out). To protect themselves, insurers often impose strict protection measures (requiring the insured to place his stamp collection in a vault if he is not on the premises, etc.). In order to discourage fraud, insurers also sometimes require an obligatory reconstitution of the object in question (jewellery purchase, for example), and the compensation is paid directly to the seller of the replacement object. Finally, insurers only agree to cover ‘reasonable’ values. In the case of very valuable objects, it is necessary to contact a specialised firm.

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