I found two points very interesting, first that most claims processed are due to water damage, and two, the loss ratio is typically very good with art collections, in other words the claims are low, and the income produced for the insurance company is strong.
The Insurance News Net reports
Click HERE to read the full post.homeowners policies, so owners need to either add a rider or purchase a stand-alone valuable article policy or fine art policy, she said. Premiums are generally in the low single-digits to double-digits as a percentage of the property's value. The larger the value of the collection, the lower the percentage is.
A major premium factor is where the article or collection is located.
For instance, a home in California's earthquake zone might face a higher premium than a Midwestern home -- as long as it didn't face flood risk, Straus said.
"Fine art premiums are certainly less than jewelry, because the exposure is better. You don't wear your art in public," she said.
High-profile thefts of art and artifacts often make headlines, but the most common claim is water damage, she said. Water claims can range from an urban apartment where an upstairs neighbor's leaky tub dripped water down a wall to the major New York gallery that recently found six inches of water on the floor that had seeped up from underneath.
Unlike traditional homeowners policies, fine arts policies include coverage for water damage from things such as sewer back-ups and seepage.
"You can underwrite for flood," Straus said. "That's one of these things that people buy insurance for."
Insurers like writing fine art insurance because the "loss ratio overall for art has always been very good," she said.
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