Insurance Value
What it would cost to replace, what it would fetch at auction, and what the cover costs a year.
$5,200
$10 – $30 a year, at 0.1–0.5% of the sum insured
Insure at the top of the replacement band. Expect the market figures if you ever sell — they are different questions, and both answers are honest.
Broad US market ratios for fine art, not a quotation. Cover written on a valued basis pays the scheduled sum; actual cash value cover does not.
Indicative ratios, not an appraisal. A schedule is written against a valuation.
Insuring art: replacement value, market value and premiums
A work of art has one value for an insurer and another for a sale. Replacement value is what it would cost to buy a comparable work from a dealer today, which is the figure a fine art policy is written to. Fair market value is what it would fetch at auction, before the seller's commission comes out. The two are commonly forty to fifty percent apart.
This instrument sets out both from a single figure, adds framing and installation to the replacement cost where relevant, and estimates the annual premium.
What fine art insurance costs
Fine art cover is inexpensive compared with jewelry. Scheduled fine art typically runs between about $1 and $5 per $1,000 of insured value per year — roughly 0.1 to 0.5 percent — with the rate depending on where the work hangs, how it is secured, whether it travels, and the size of the schedule.
Cover written on a valued basis pays the agreed sum without argument at claim time, which is the point of scheduling in the first place. Homeowner's policies usually cap art at a low blanket figure and settle on actual cash value, which is not the same thing at all.
Getting the sum insured right
Set the sum insured at replacement value, not at what you paid. A work bought from a gallery five years ago may cost considerably more to replace now, or considerably less if the artist's market has cooled — both directions matter, since underinsurance leaves you short and overinsurance is money spent on nothing.
Include framing, glazing, mounting and installation. On a modest work these can be a meaningful share of the replacement cost, and they are almost always forgotten.
What an insurer will want to see
A schedule for anything significant generally needs:
- An appraisal stating replacement value, usually refreshed every three to five years.
- Photographs of the front, the back and any signature, labels or inscriptions.
- The purchase invoice and any provenance documentation you hold.
- A condition record, so pre-existing damage is not argued about after a claim.
- Notice before the work travels — transit and loans are frequently excluded unless declared.
| Figure | Typical relationship to retail | Used for |
|---|---|---|
| Replacement value | 100 – 130% of retail | Insurance schedules |
| Fair market value | 45 – 70% of retail | Auction, estate and tax valuations |
| Trade or quick sale | 25 – 45% of retail | Dealer offers, immediate liquidity |
| Annual premium | 0.1 – 0.5% of insured value | The cost of the cover |
Broad US market ratios. Works by artists with a thin secondary market sit at or below the bottom of the market and trade rows.
Questions we are asked
- How much does it cost to insure a painting?
- Fine art cover generally runs about $1 to $5 per $1,000 of value per year, so $100 to $500 annually on a $100,000 schedule, depending on location, security and whether the work travels.
- Should art be insured for what I paid or its current value?
- For what it would cost to replace today. Purchase price goes out of date in both directions, and a claim is settled against the sum insured.
- What is the difference between replacement value and fair market value?
- Replacement value is the retail cost of acquiring a comparable work now, which is what insurers use. Fair market value is what the work would sell for between a willing buyer and seller, typically well below retail.
- Does homeowner's insurance cover artwork?
- Only to a low blanket limit, usually settled on actual cash value. Anything of consequence should be scheduled on a fine art policy or a rider written on a valued basis.
- How often should art be revalued?
- Every three to five years for most collections, and sooner if the artist's market has moved sharply.
Beyond the EstimateHave the work recorded
Captures, condition and provenance in one file — the evidence a claim rests on.