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The Big Difference
Our appraisals, in the event of an insurance claim, are designed to address, and to be responsive just about any question in respect to the appraisal, that an insurance adjuster could put forth. The intent is to make the insurance claims settlement process as expeditious and as hassle free as possible.
Keeping in mind, that as the name, insurance claims adjuster implies, that this is a person appointed by the insurance company to adjust the claim downwards or, into the insurance company's favor as much as possible. Our appraisals are quite in depth and comprehensive, and have been designed to avoid this scenario as much as possible.
On the converse, it would be very rare for any insurance claims adjuster to ever be adjusting an insurance claim upwards. In this text, they are employed to work for the insurance company. Nonetheless, our appraisals have been designed and written so as to avoid contentious issues and therefore, to permit the claim to be paid to the insured as expeditiously and as hassle free as possible, being therefore, to the advantage of all concerned.
Our appraisals are also written for any tax matter including donations.
REPLACEMENT VALUES - The replacement value contained in our appraisals is defined as being, at the highest realistic price from a major art gallery, organization or, individual located within a major Canadian, United States or European center, to that of similar and like item, based upon its size, subject, mannerism, medium, style, condition, ability of execution and approximate age for valuation purposes.
On the converse, lets use this hypothetical
case:
If a person were to purchase a diamond ring for
$10,000.00 and have it appraised at $15.000.00, the insured is then
paying replacement premiums on the $15.000.00 value. If a claim occurs,
it is usually reported to the insurance agent, who then reports it to
the insurance company. In many instances this is a claims office of
an insurance company or a firm of insurance adjusters, all of whom
are highly trained and experienced to settle claims to the advantage
of the insurance company and not you.
Consequently, from a replacement standpoint, and
depending upon the item, the insurance company will go to a diamond
wholesaler and negotiate a price for another diamond, then have it set
in a similar setting. The new replacement ring is then given to you,
the insured, by the insurance company, less any deductible amount you've
paid.
In this example the Insurance company has paid
only the wholesale value or perhaps due to volume, even less than the
normal wholesale value to replace the ring. In this hypothetical example,
it is possible that the insurance company will only pay $4,000.00 to
replace the lost ring. Meanwhile, you have been paying premiums based
upon a $15,000.00 replacement value. On top of this -- you're still
paying the deductible.
Back to art now. In many instances, art and auction dealers buy merchandise
to resell through their own auspices. And it is a fallacy to think all art
dealers and all auction houses only sell what is consigned to them. There
are some exceptions, but the general rule is, that much (if not all) of
the merchandise is purchased at a wholesale level. With Auction Houses owning
the actual work, it puts them in a very nice position at auction time, especially
with more expensive items. It gives them a way to establish their own "reserve
price" - that being not less than the cost plus a reasonable profit to the
auction house or gallery.
There are many methods employed in selling merchandise
at auction. Even when it is stated that there is no reserve, the auctioneer
has the right to determine at what amount to start the bidding. They can
also withdraw the item from the auction if the opinion of the auctioneer
indicates the item may not reach the predetermined price set.
In addition, many will recommend (or not recommend)
that the item be insured. If insured, only insured at its purchase price
and under the contents of a home owners policy.
Many will appraise the item for you since they buy
and sell art. But if a claim is ever made, it could provide another loophole
for the insurance company to reduce the claim. The loophole being that
it deems the art gallery, or the auction gallery appraising the work,
only appraised the item for replacement through their own auspices or
to their own benefit. Herein lies a possible conflict of interest, especially
if the claim ever became contentious or litigious.
In this scenario, neither you, the art dealer, or
the auction gallery want the resulting problems or time and costs associated
for settling the claim. All you want is your claim settled and settled
by the insurance company now.
If you feel the item has sufficient value, we recommend
having it independently appraised and insured using the scheduled articles
portion of an insurance policy, or attaching a rider for these purposes.
Otherwise, a loophole could present itself to the insurance adjuster to
reduce the claim which then reduces any settlement eventually made to
you. All with the claim still subject to the deductible portion of the
policy.
And it's also possible that you would not be able
to sell the replaced item at a price anywhere near your original purchase
price, especially with jewelry.
The Big Difference for works of art is that
it's now possible to purchase art and have it appraised and insured all
in one day. Although in reality, it depends on just how fast you work
and how fast the art or auction dealer and your insurance agent can work
together as well. Okay... So it could be a few days. We also realize that
your insurance agent may "hold you covered" without an appraisal. But
without an independent appraisal, the insurance agent is not an art appraiser
so the agent can only cover to the extent of the purchase price of the
item. If a claim were to occur now without an independent appraisal, it
would be very difficult for you to justify to the insurance company that the replacement
value of the item was more than the purchase price. Again, a
loophole presents itself to the insurance adjuster to reduce the amount
of the claim. Consequently, as the insured, you could be out the difference between the retail and the
replacement value. However, depending upon the value and/or the item, an appraisal
still must be sought and obtained.
In addition, if a claim occurred in the interim and
you did not have an independent appraisal, it could lead to the issue
becoming contentious and litigious. All because the insurance adjuster,
in his or her considered opinion, states that the item was not even worth
the amount that you paid for it.
We know of no other appraisal service that currently
provides this type of service at this rate of speed. In addition, the
works to be appraised and insured using our service subject you only to
the deductible portion of your policy in the event of a claim when it
is insured correctly. This makes it much easier and faster for the insurance
company to settle the claim where you receive the net proceeds from the
claim much faster. And, you can also go back to the art dealer or auction
dealer, or another seller, and obtain another item that is satisfactory
to you much faster. Your insurance agent can provide this service for
you at a much faster rate than using another method.
This type appraisal and turn around time can only
be offered in the area of "new, contemporary and/or decorative"
art.
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