Fine arts are always a difficult category to insure.

It covers a broad range of items including paintings, statuary, textiles, art glass and other decorative items.

However, not all decorative items are fine arts; an insured may be very attached to her collection of cat figurines, but unless the figurines were made by a known artist they are not fine arts, even if some were expensive.

What some people consider a fine art is actually a collectible, or just an expensive item used on special occasions, but not exactly artwork.

What Is Fine Art?

The first step in insuring fine arts is determining that an object is indeed a fine art. A fine art is a genuine work of art with some historic or artistic significance that requires specific fine skill to create and is often rare or unique. A painting I create is certainly rare since I don't paint; likewise it has little to no artistic value or merit, even if it turns out reasonably well.

A popular activity now is to attend the Painting with a Twist or Paint and Wine classes where a group of people are walked through creating a painting of a particular scene while drinking wine or other alcoholic beverages.

While the attendees create respectable pictures, they are not fine art. Framed prints that are readily available, even if the insured had them custom framed, are still just personal property and not fine arts.

Established Artist

So what about the insured who is an artist and paints pictures for his own collection or even sale? The insured sustained a fire and was looking for compensation for the damage to his artwork. Unless the insured has established himself in the art world beyond his immediate community, his paintings are not fine art, regardless of how well done they are.

A copy of a Rembrandt, while beautiful, is not worth the same as an original Rembrandt. Therefore, the insured would be compensated for an equal quality picture of the same subject.

Is That Collectible Covered?

Collectibles are generally items that appeal to a broad audience whose members accumulate the items. Baseball cards, comic books and certain figurines are all collectibles. Most are mass produced with a limited number still available, which is part of what makes them collectible. Some may be on the market today.

Many people collect Swarovski glass figures, and there is a collectors club with annual pieces available to those in the club. They are expensive, but they are not fine arts.

Some carriers do allow collectibles to be scheduled as fine arts; generally those policies will include bric-a-brac in their listing of art objects and may indicate statuary including but not limited to Hummels; wording like this opens the policy to the scheduling of collectibles as fine arts.

But what about a bride's fine china and crystal stemware she registered for and received as wedding presents? Stemware and china can be expensive, especially when several place settings are owned by an insured. Such items are personal property. While expensive, they are mass produced, readily available, and even though the insured uses them only on special occasions, they are not fine arts.

An insured had a beach themed restaurant and claimed a loss of $300,000 in stolen shark teeth. The teeth were both decoration and for sale to customers. The policy in force described fine arts in part as “….rare glass, bric-a-brac, and similar property of rarity, historic value or artistic merit.” Shark teeth can go for as little as $7.99 for 50 teeth on eBay to $2,500 from a shark fossil website. Again, since the policy includes bric-a-brac as fine arts, the shark teeth could be considered fine arts and should be covered as such.

Determining Real Value

But once an item has been identified as a fine art or even a collectible that the insurer will allow the insured to schedule onto the policy, valuation is the next step. In order to determine a value, most fine arts and even collectibles should have an appraisal from a professional appraiser who specializes in appraising works of that sort.

A jewelry appraiser's opinion on the value of the insured's statuary is probably not accurate. You need the proper appraiser for the respective item.

Detailed Appraisals Needed

Appraisals need to be detailed; they need to list the materials used in the art work, be it gems and metals or oils and canvas, era in which the work was created, quality of the pieces used in the work, and other information. For jewelry, the quality, color, carat weight, type of stone, and whether it has been heated, irradiated, filled or received other treatment are all important information.

With furs it is important to know the type of fur, whether it has been dyed, how much of the garment is fur, area of origin, and condition of the garment are what's important. Guns, cameras, musical instruments, antique furniture, porcelains, coins and stamps all have their specifications as to what is valuable property and just how valuable it is.

The American Society of Appraisers and the National Association of Jewelry Appraisers can point insureds in the right direction to locate an honest and qualified appraiser. There are appraisers for most any type of property, the issue is in finding them.

Remember that condition also affects the value of the property. A faded painting, no matter how famous the painter, will not be worth the same as a painting that is in good shape. Restoration attempts can actually decrease the value of an object. Cleaning solvents and modern materials may cause more harm than good.

Recent Appraisals

Most carriers require the appraisals to be no more than a few years old. The value of items fluctuates over time, and an old appraisal may either artificially inflate the value or understate the value of the item.

Once the item has been determined to be a fine art and an appraisal is in hand, the item can then be scheduled onto the policy. The HO 04 61 Scheduled Personal Property Endorsement is commonly used to insure these items. It provides open perils coverage for the items and allows jewelry, furs, cameras, musical instruments, silverware, golfing equipment, fine arts, stamps and coins to be scheduled with specific limits.

This open perils coverage is particularly important. The named perils may be hazards to all property, but jewelry is more likely to be lost or damaged than be damaged by fire, riots, weight of ice, snow or sleet, or other named perils.

Scheduled Personal Property Endorsement

Theft is likely for jewelry, but the HO 00 03 has a $1,500 limit for theft of jewelry, watches, furs, precious or semiprecious stones, or $2,500 for theft of firearms and related equipment. When the scheduled personal property endorsement is added, the insured is covered for loss by theft and many other perils.

An insured had taken an expensive necklace on a cruise; while looking out over the rail at the water, the necklace slipped off and fell into the ocean. The loss was covered because the item was scheduled. Otherwise, the insured would have had no coverage for the loss.

Fine arts is a broad category with many types of property. It's important that the property be appraised for the value so it can be insured properly, and then an endorsement must be added. Some carriers give discounts if the property is kept in a safety deposit box.

When in doubt, it is advisable to discuss the piece with the underwriter so that the insured is properly protected from loss.