Posted in: Personal Insurance
Have you recently inherited a piece of jewelry or art that is not yet insured? It’s also possible that the worth of a valuable you own has increased over the years without your knowledge, and it’s no longer adequately protected by your policy.
I cannot stress enough that appraising your valuables is critical for securing adequate insurance. But how do you go about having the appraisal done? Read my interview with Colleen Boyle of Pall Mall Art Advisors below. With over 20 years of experience in the art and financial world, she shares her views on the importance of appraising your valuables to secure adequate insurance coverage and how to find a qualified appraiser.
Q: Why is the appraisal of any valuable important?
A: Having adequate insurance coverage—An appraisal process will help you identify what you own, know the value, and document your valuables in the form of either a visual inventory (photographs/videos), a written report, or a combination of both. This is extremely helpful, if not a must, to adjust your existing contents coverage within your Homeowners policy or to select sufficient insurance coverage for all your items so you can be made whole should a loss occur.
To demonstrate my point, here’s an example. Pall Mall conducted an appraisal for a client of mine who had a total contents coverage at $250,000. As a result of the evaluation, we discovered they had a little less than $1 million worth of books and manuscripts—they had absolutely no idea they were worth that amount of money. They scheduled some of the valuables on their insurance policy, and they also increased their contents coverage on their Homeowners’ policy to cover all the other items in their house (furniture, decorative items, etc.). Approximately a year and a half later, that client had an electrical fire. Because they had proper visual and written documentation of all of their lost valuables, it helped make the claims process more efficient, and they were reimbursed for everything they had lost in the fire.
Q: How do you select the right appraiser?
A: Work with your insurance advisor to select an appraiser that fits your needs; your advisor might even already have a trusted relationship with a reputable appraiser. This relationship will provide you with more comprehensive protection all around, because it takes both a proper appraisal and a strong policy to protect your valuables. When your insurance and appraiser professionals work together closely, they are more likely to catch gaps in coverage and value changes.
For instance, a client of mine wanted to make sure their Andy Warhol screen print scheduled on their insurance for $22,000 was protected during their move. Pall Mall reviewed the schedule, and it turned out the piece was actually worth over $200,000. We recommended that the piece be revalued at the current retail replacement value, and we worked with the insurance advisor to have the client’s current policy changed to reflect the correct value so that it would be protected during transportation.
Q: What qualifications should a good appraiser have?
A: Here are six selection criteria to consider:
- Industry recognition
I highly recommend selecting an appraiser who is a member of at least one of the three industry associations (Appraisers Association of America, International Society of Appraisers, and American Society of Appraisers). These associations have strict criteria for accepting new members, and they require annual continuing education to keep current.
A good appraiser should also stay up-to-date on their USPAP—an exam taken every other year that keeps appraisers current on tax law changes, updates in IRS appraisal requirements, and insurance market developments.
- Specialized expertise
Many appraisers don’t have deep expertise in every valuable you might have. But, it behooves you to find an appraiser who specializes in knowledge of multiple valuables (jewelry, art, antiques, wine collection, sports memorabilia) so you are receiving an accurate evaluation and recommendations for protecting all of your different assets.
If an appraiser is coming to your home, would you be concerned with your privacy and security? Only a few companies address this concern. For instance, at Pall Mall we conduct background checks on our appraisers, and we also send a bio and a photograph of the appraiser to you prior to the appointment. This is not a standard process, so be sure to select an appraisal company that makes you feel comfortable.
Although non-disclosure agreements are important for people who are concerned with confidentiality, they are not offered by all appraisal companies. Make sure to work with an appraiser that ensures your information won’t be shared with anyone, including attorneys, wealth advisors, and fellow coworkers, without your express permission.
- Fiduciary and advocate
Appraising is more than just a transaction. A good appraiser serves in a fiduciary role protecting your best interests when providing guidance on handling your valuables and ensuring you have proper insurance coverage. For example, at Pall Mall we protected the interests of one of our clients by identifying the best international auction house where their artwork would sell for the most money (which was overseas), and then also helped ship the piece.
If you have any questions about selecting the right appraiser or evaluating and insuring your valuables, contact me at email@example.com.