Elite Risk Acceptances

Protecting your high value collectibles from “art-jacking” and other losses

Local art collectors and consumers who own high value drawings, paintings, photographs and sculptures should be concerned by the rising number of art-jackings and thefts reported in South Africa. A brazen heist carried out on the N1 Highway near Pretoria saw 31 paintings by nine local artists stolen, leaving an unfortunate collector ‘out of pocket’ to the tune of around half-a-million rand.

“This type of criminal activity should serve as a warning to art collectors to reassess the security arrangements around their priceless collections and to check that their art is insured at market value,” says Christelle Colman, MD at Elite Risk Acceptances, a subsidiary of Old Mutual Insure. 

She adds that too often, local victims of art theft are disappointed to find that the insurance cover they have in place is not adequate for their art collection. This is partly a result of pieces having appreciated significantly in value over time – either upon the death of the artist or depreciation of the rand-exchange rate – but also because many general household insurance policies apply a minimum value limit per item insured and would therefore fail to provide sufficient insurance cover for fine art that far exceeds this assigned value.

Although media tends to focus on high profile art thefts, with a recent example being the theft from a Dutch museum of a Van Gogh painting, valued at €6 million, Colman says that the reality in South Africa is that the values of stolen work varies.

“Big ticket thefts make good headlines when in reality there are countless artworks valued at between R5 000 and R100 000 reported damaged or stolen each year,” says Colman.

A recent investigative exposé zoomed in on how organised criminals were selling expensive artwork on the black market. “Although this type of crime is not yet endemic in South Africa, it is something that high net worth individuals with global exposure and personal art collections should take note of.” 

She offered four tips for high net worth individuals (HNWIs) to avoid disappointment at claims stage.

1. Complete an inventory of your art assets and collectibles or even better get a professional valuation done, which Elite can facilitate. “I cannot imagine anything worse than discovering you were sitting on a truly valuable, uninsured or underinsured piece of art after suffering a burglary or fire,” says Colman, who adds that priceless collectibles could be hanging on the walls of many unsuspecting homeowners. Who knows, perhaps the painting handed down by your grandmother, and now gathering dust in your living room, turns out to be an early Battiss or Sekoto; you won’t know until you have it valued.

2. Determine whether your high value art collectibles are on cover on your existing insurance policy. You should check your policy wording for what items are on cover and what excesses and exclusions apply. “Individuals who have single high value art works or a collection of pieces should consider placing their contents insurance on cover with a specialist insurer who understands the unique risks associated with collectables, to avoid costly surprises at claims stage,” says Colman.

3. Ensure that each art collectible is correctly insured at insurance replacement value, and review this valuation frequently. “Art prices tend to fluctuate widely based on their perceived collectability, the success or death of an artist and even movements of the rand against the dollar; we can accommodate this volatility by recommending a team of experts to assist our clients with facilitating this important value calculation,” says Colman.

4. Be prepared for unexpected losses, as art collectibles can be damaged or lost in the strangest circumstances. Imagine, for example, that your newly commissioned sculpture is destroyed in a studio fire, or your newly acquired painting goes missing while in transit between Paris and Johannesburg. Colman points out that Elite’s HNWI clients enjoy peace-of-mind thanks to features such as deposit and transit cover built into the policy. “If you have commissioned an artwork that requires a deposit, and it gets stolen or damaged before it is completed, your insurance cover should allow you to recover this amount, provided you specified it on the Fine arts and valuables section,” she says.

“It is impossible to insure the sentimental value linked to your favourite artwork; but you can take steps to secure financial compensation, at replacement value, for any loss suffered due to damage or theft. To avoid disappointment, we suggest dealing with a specialist insurer that has the knowhow to correctly assess and value art collectibles and the financial clout to pay-out high value claims,” concludes Colman.