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INSURANCE APPRAISALS

 

1) Appraisals for Establishing  and Updating Insurance Premiums

Appraisals are typically required by insurance companies for establishing premiums.  Without an appraisal, the insurance company will have no way of identifying what the replacement value of your property should be.  Replacement value (sometimes call "retail replacement value") is the amount of money it would take to replace the insured property with a property of comparable quality. Replacement value is inclusive of all costs, such as shipping, framing, and buyer's premium (if the work is replaced at auction). It is generally advisable to have your appraisals updated every three years to make sure that the insured value is current.

  

2) Assessing Damage and Loss

An appraisal is essential for making a claim when an artwork is damaged or lost. Problems can be caused by errors in shipping and packing, natural disasters, and less-than-optimal storage. Problems can also be caused by "inherent vice," in which problems are native to the medium itself.  Inherent vice includes such issues as the fading of light-sensitive pigments in a watercolor, paper that yellows, oil paint that is prone to cracking, metal that rusts, or parts in a new-media piece that no longer function.  

Through inspection (when possible) and research, the appraiser identifies the pre-damage value of a work, then determines the diminution in value caused by the damage. The appraiser, typically consulting with conservators, identifies the feasibility and approximate cost of conservation and value or projected value after conservation.

 

3) Insurance Appraisal Review

Appraisal review is, according to the Uniform Standards of Professional Appraisal Practice (USPAP), a unique activity from appraisal. An appraisal review can be written with or without the appraiser's own opinion of value, depending on the client's needs. Insurance companies  in need of a second opinion to review an appraisal that has been submitted can commission an appraisal review. 

 

 


Image: Valerie Hegarty, Homer Was Swept Away (Northeaster), 2007