How to reduce the cost of insuring your collection

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Image courtesy of Creative Commons.

When deciding where to store or display your collection it is wise to consider how insurers will view your choices. That is the view of Richard Northcott, director of the High Value Cargo division for Pembroke Managing Agency.

“As an art collector looking to purchase insurance you are going to find a different level of interest from insurers if all your art is, for example, in California to if it is in Chicago or London or elsewhere, just because of the perceived additional risk from catastrophe,” he said.

Risks such as earthquake on the west coast of the United States, windstorm on the south east coast and terrorism in cities such as London can all mean that insurers struggle to provide adequate capacity to cover art collections stored in those areas.

“I would never want to try and tell a private collector where to put his art,” says Northcott. “However, if I am assessing it for insurance risk, if it is spread over five locations, it becomes a different risk to if it is all in one place.

“Insurers will also look at it differently if those five locations happen to include California, Florida and central London as opposed to a leafy suburb in Surrey, a nice villa in Marbella and so on. What you’ll end up getting is a differential in pricing, and a differential in the number of insurers who are interested in writing the policy depending upon those factors.”

He added that in the current, reasonably competitive market it would be very rare outside of the freeports for a client to be unable to find insurance because there is a substantial amount of capacity available.

However, clients need to be aware that, depending on the choices they make as to where to store and display their work, insurance might cost significantly more.