Do I need to schedule fine arts?

[yoyowordup]

Can you tell me reason(s) why fine arts need to be scheduled? It's been a long time since I handled much personal lines or went to a CIC personal lines class.

I know jewelry and guns and some other classes have sublimits for theft, but that doesn't apply to fine arts. If I have an H0-5 that provides all risk (or "open perils") on contents and I have high enough limits for personal property, what other benefit is their to scheduling fine arts.

Your advice and opinions are appreciated.

Thx.

[ForumReader]

To provide broader coverage and establish valuation. So many are unique, one of a kind pieces. If your Picasso was damaged by smoke, there's no going out and buying a new one just like the old one. Getting an appraisal prior to loss establishes value.

[d's insurance store]

If you've got HO5 'all risk' on contents, that almost takes in the listed exclusions to named peril contents and affords coverage. So long as you've got sufficient contents coverage for any high value exposures and there are no sublimits for the fine arts items, you may be just fine. Of course, if the fine arts pieces are of high value, it never hurts in a claim situation to have firm and verified values. With that HO5, nothing is coming to mind with all risk contents that would leave you exposed...at least to me. Of course, the scheduled property generally has a zero deductible...maybe that's a concern.

[yoyowordup]

To provide broader coverage and establish valuation. So many are unique, one of a kind pieces. If your Picasso was damaged by smoke, there's no going out and buying a new one just like the old one. Getting an appraisal prior to loss establishes value.

ForumReader - I'm not questioning whether or not an appraisal would be extremely helpful at the time of loss as I agree that it would. I'm questioning whether or not scheduling fine arts provides better coverage than an H0-5 type form.

[Companyman]

Probably the bigger issues are breakage and mysterious disappearance. Art doesn't have to be big to be expensive, but typically it will not be taken out of the home. The vast majority of the time it will be a theft loss (versus jewelry being lost). Breakage would be the one for fine arts. An ISO HO5 won't give coverage for that unless associated with a covered peril. ( A fire results in a cabinet falling over and breaking jade statuettes would be covered) Think vases, statues etc. Even paintings could fall from a wall and be damaged. The other folks hit a few of the issues. Making sure there is enough coverage in the event of a total loss and current valuations, Some fine art, even from the same artist, can vary dramatically depending on the quaility, subject matter, and market.

[yoyowordup]

Probably the bigger issues are breakage and mysterious disappearance.

Breakage would be excluded for eyeglasses, glassware, statuary, marble, bric-a-brac, porcelains and similar fragile articles other than jewelry. Many (if not most) fine arts would not meet this definition and would therefore be covered I believe. Where is mysterious disappearance excluded?

Right now I'm actually concerned with signed Art Rock posters and some other collectible rock memorabilia.

[jtownagent]

I do not mean to come across as judgemental, but please attend a class and brush up on personal lines issues, or deligate to another in your agency that does understand personal lines exposures and coverage issues. If you do not know the answer to this basic question, I am concerned with what else you may be missing on behalf of the client.

[yoyowordup]

I do not mean to come across as judgemental, but please attend a class and brush up on personal lines issues, or deligate to another in your agency that does understand personal lines exposures and coverage issues. If you do not know the answer to this basic question, I am concerned with what else you may be missing on behalf of the client.

I do mean to be judgemental, you are an idiot.

I am an agency owner CIC for 28 years and love to have open dialogue with others in my office and with my peers. As you can see by this dialogue there is no cut and dried answer to this question and even after a claim the adjusters don't always know what they have covered.

If you don't like the format of a forum, go away pinhead.

[Brenda H]

Well as a personal lines manager, the biggest reason I give clients to schedule fine arts is that it takes away a deductible. In texas, with most companies only writing 1% deductibles, that can be quite substantial. That and making sure that you have enough personal property coverage for everything in the house. The only other consideration is to read your policy regarding replacement cost. Some exclude anything that is obsolete or irreplaceable.

[wariline]

Even an HO5 will always exclude Earthquake and Flood. In addition, there usually is a sublimit if the items are off-premise. Have them scheduled ususally addresses those concerns.

[SolutionConsultant]

There are alot of unknowns here:

1) Value of the home which dictates the amount of contents coverage, and is the home insured to value to begin with.
2) What is the percentage value of the contents given to the homeowner? 50%? 70%?
3) Is the contents coverage guaranteed replacement cost?
4) What documentation does the homeowner have of the items that they have?
5) If the home was a total loss would the fine arts supercede the value of the contents?

Insurance is for the worst case scenario. Because fine art is SO inexpensive to insure, I tell them to schedule every item that the insured would not be comfortable paying for themselves out of pocket for a single item loss less whatever the homeowner deductible.

I would also want to know what carrier are you going to be using? Chubb? Chartis? Their Art Experts alone are worth the policy themselves, and will work with clients to properly secure, store, and protect all art work.

[csrsd]

Most homeowner's policies have sub-limits for property such as fine arts, jewelry, collectibles, etc. Scheduling enables the insured to receive the full value of the item(s) in the event of a loss and makes the coverage all-risk.

[yoyowordup]

Most homeowner's policies have sub-limits for property such as fine arts, jewelry, collectibles, etc. Scheduling enables the insured to receive the full value of the item(s) in the event of a loss and makes the coverage all-risk.

Actually this is incorrect. Fine Arts is not usually a class with a sub-limit. That is the whole reason I brought up this topic.

There are alot of unknowns here:

1) Value of the home which dictates the amount of contents coverage, and is the home insured to value to begin with.
2) What is the percentage value of the contents given to the homeowner? 50%? 70%?
3) Is the contents coverage guaranteed replacement cost?
4) What documentation does the homeowner have of the items that they have?
5) If the home was a total loss would the fine arts supercede the value of the contents?

All of these are important points but not what I'm worried about at this time. Assuming all of these point have been addressed, what difference does it make if you schedule fine arts vs not scheduling them. Encompass Elite (H05 similar) policy. Contents limit is adequate, Repl Cost Contents is a given (or better be on a preferred home policy), documentation won't change the coverage on scheduled vs non-scheduled it will just help determine value in the event of a loss.

[suba4004]

Why don't you just tell everyone what answer you would like and then someone can give it to you.

[jtownagent]

Advantages of fine arts policy
1)No deductible applies-If homeowners policy has special hurricane deductible this can be significant issue for hurricane loss.
2)World wide coverage-in case the specific piece of fine art moves from location to location, 10% limit at other residence would apply under homeowners policy, so a very valuable piece may be limited by this clause in the homeowners policy.
3) Exclusions under a Valuable items policy may be "less exclusionary" than the homeowners (earthquake-flood etc).
4) Valuation at time of claim- Fine arts policy is usually "valued coverage". Homeowners is replacement cost, however Replacement cost on contents endorsement under PROPERTY NOT ELIGIBLE-Antiques, Fine Arts,paintings, and similar articles. So coverage is ACV. Payment amount is certain for total loss under a valuable items fine arts policy.
5) Fine arts coverage is often less expensive in premium than increasing contents coverage under the homeowners.
6) Loss to Pair or Sets is better addressed under a Valuable items policy.
7) If separate policy rather than endorsed onto a homeowners policy, Fine arts losses do not effect homeowners renewal pricing and eligibilty.
Underwriters and claims repreenatives prefer insuring and adjusting these items under a separate valuable items policy.
9) Loss control discounts-Humidity control, anti-theft etc.
10) Negotiate pricing/conditions with underwriter on large schedules.

Disadvantage of valuable items policy
1) Appraised value is usually establishing a maximum limit of coverage. Appreciating properly can easily be underinsured under a valuable items policy.
2) Need to re-appraise from time to time.
3) Warrantee's in policy
4) Additional bill and premium