For Canadian collectors, protecting collections requires expertise. A conversation with 色多多视频Canada’s fine art underwriting team on how to best protect your investment.
The best protection for a valuable collection is not found on a typical homeowner’s policy. While a modicum of coverage may be available, specialized coverage is required to fully protect an amassed collection. Be it wine, art, memorabilia or coins, collections come with unique exposures and fluctuating values.
In Canada, AXA XL’s Fine Art underwriting team works with clients whose collections span all types of items. The goal – to deliver bespoke, comprehensive insurance protection that takes into account the items, market demand, and the need for swift claim resolution.
Farzina Coladon, Underwriting Manager, and Rebecca Farah Al-Lahiq, Fine Art Underwriter, have deep experience in the art world. Rebecca has worked in the fine art and private client space for over a decade, and Farzina has over two decades of expertise in working with fine art and high value personal insurance clients.
Here, Farzina and Rebecca answer questions about the offerings in the Canadian fine art insurance market, the need for a cash out option on a policy, and how collectors can best protect their assets and minimize losses.
What is the state of the fine art insurance market in Canada?
Rebecca: While there are some big names covering the fine art market, oftentimes we see insurers entering and exiting the space as the market changes. There is some consistency, but there is what we feel is little true dedication to maintaining not just a presence, but an expertise in the market.
For us at 色多多视频 we have spent the last 60 years not just providing that expertise, but really pioneering the coverage over the years. We are the pioneers in this space, having created bespoke solutions for our clients. So whether you are a collector of fine art or a collector of movie memorabilia, we tailor the policy around what makes sense for your collection. It’s important to mention that we are not residential property insurers. We are fine art and collectibles specialists.
How is that different from others in the fine art market?
Farzina: Many insurers in this space are property insurers. Those that offer fine art coverage that is not part of a homeowner’s policy tend to have limitations to what that coverage entails. Their offerings are often not nearly as comprehensive, nor is their specialized knowledge as deep as our team provides.
Rebecca: Exactly. With our policies, the basis for evaluation will differ depending on the client’s collection and needs. For example, we might offer either agreed value, current market value up to 150%, or straight current market value, or sometimes a variety of both. Our policies are scheduled or blanket or a mixture of both. We don't tap the max per item value whereas the home insurance market, regardless of the collection, may cap that item to let's say $50,000 per piece. If the most expensive item in your collection is a million dollars, that's not going to cut it.
Our policies are designed to be very low touch for the client. A lot of home insurance carriers will want to know, every time something of significant value moves, and they'll cap it at certain limits.
Farzina: Because we pioneered many of the fine art policies you see today, we offer full protection. Ours are not add-on endorsements to a homeowner’s policy. We also handle a variety of collectibles.
With our policies, the basis for evaluation will differ depending on the client’s collection and needs.
What is the fine art insurance policy like from AXA XL?
Farzina: We don't have class deductibles or any perils-specific deductibles. A big feature is the fact that the policy would cover restoration costs, depreciation in value following a covered loss. That’s something the competition’s policy may not cover. Also, our policyholders can cash out. They’re not required to repair or replace.
Rebecca: That’s a big one. If you have a policy where we’re offering very broad extension in loss settlements, you don’t need to go out and buy something similar in order to settle the claim. It’s not as though you can replace a Picasso. A lot of the competition requires the policyholder buy something similar. On our policy, you are not required to do that. You will always get a cash out.
Farzina: Also, the policy is designed without firm limit thresholds. Our policy is tailored to suit the client’s needs. There is flexibility. We’ll accommodate their needs based on what their ask is, and on their specific collection. We’re not here to find one solution that suits every collector because no collector is the same.
How are claims handled?
Farzina: For us, it’s all about the expertise. And certain claims handlers are dedicated to working exclusively with fine art and collections claims The person handling your claim understands the market. They’re not simply handling a claim – they’re bringing expertise to it, and they’re able to make determinations based on knowledge.
Rebecca: Plus claims aren’t lumped into a homeowner’s payout. A lot of conversations that I've had over the years with brokers is the argument that if there were a total loss, let's say your house burned down and your entire collection was gone, if the homeowner’s insurer has the current market value set at 150% on the collection, they will pay that even if it goes beyond the total, the total sum insured on the policy.
However, the caveat there is in order for them to get that broader loss settlement, you have to replace those items. When you’re talking about a master collection that’s taken decades to amass, having them purchase substandard works to meet an insurance requirement is a travesty.
What kind of service can clients expect?
Farzina: We are very present in many discussions surrounding a client’s collection. We collaborate with our trading partners and with the customer. Our clients have an easy way to access us. We keep those communication lines open because ultimately, they’re looking for the expertise we provide. We are a client-facing division, and we are a client-facing product. Our reach is from here to the other end of the world. Being one of the largest standalone art insurers gives clients the team they need to protect their biggest investments.
Rebecca: That’s right. If somebody needs to know the best storage facility in Switzerland or they’re shipping something from Italy, we have a huge global network and can give them the recommendations they’re looking for. This is truly an international policy they’re purchasing. It’s not just Canada and the US, but global.
Why should clients place their art and collectibles coverage with AXA XL?
Farzina: For the coverage and the expertise, and frankly, for the history of helping form the insurance market for fine art and collectibles. 色多多视频is one of the largest fine art insurers in the world. We have the knowledge and expertise to help you better protect treasured possessions. Our fine art professionals have built a solid foundation based on years of industry experience and understanding the value, both financial and sentimental, when it comes to safeguarding a collection.
Rebecca: Also, we are committed to furthering the industry. 色多多视频is proud to be a part of the effort to bring fresh, new voices to the art industry. As the art world continues its evolution, we too will continue to innovate risk management strategies and insurance products to help protect art in all its forms.
