Is Restoration cover built into your Insurance policy?
By Alexandra Richards, Private Clients Development Executive
Alexandra Richards, Private Clients Development Executive at Bruce Stevenson Insurance Brokers looks at why it is so important to ensure that your collection, whether private or corporate, has restoration cover built into the insurance policy.
Every insurance claim is different and each one has its own story to tell and can often be emotional. Like other possessions, be it musical instruments, paintings or books, they usually have a sentimental value in addition to their market value.
Under a specialist collections insurance policy, the amount settled for an item that is partially damaged (be it through fire, water damage or simply by an accident) is not only the cost of restoring the item, but any subsequent drop in value. However, the total amount to be settled must not exceed the value of the item, or else it is considered by underwriters as a ‘total loss’ whereupon they settle the full value of the loss.
The purpose of insurance is to put you back in the same position as you were immediately prior to the loss.
Recently we dealt with a case where a piece of art was badly damaged due to a fire.
A fire occurred in the ground floor reception room of a private home and although it was apparent that the drawing room door was closed, it was clear that a large volume of dense smoke permeated throughout most of the property.
Forensic testing confirmed that the cause of the fire was as a result of an exposed bulb of a halogen uplighter placed in close proximity to a combustible curtain fabric. The pattern of burning clearly showed that the seat of the fire was at the front of the drawing room.
There was fire and smoke damage to a number of ‘collection’ items including a watercolour that suffered extensive heat and smoke damage but was protected by glass. Restoration work commenced to clean the surface and varnish to remove smoke deposits. Not only was the work physically damaged, but a smoke odour lingered. The reverse of the canvas was also cleaned, combined with Ozone treatment, good air circulation and filtration which resolved the problem of the smell.
In accordance with terms of the policy, costs were met for restoration plus any subsequent loss in value. As evidence of the treated areas were visible under ultra –violet light, the insurer sought the opinion from two independent galleries who had dealings with the Artist and works of this nature, together with an auction house to ascertain the diminution of value, in percentage terms.
The watercolour was insured on an agreed value basis and it was confirmed that the value had depreciated by 55%. The claim was therefore settled for restoration and depreciation costs with the insured retaining the work. The insured was satisfied that the work was salvageable and not a total loss. The policy schedule was then amended to reflect the revised agreed value.
Accidental damage is the most frequent cause of collection claims so it pays to be prepared and work with the principle that prevention is better than cure.
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