How is a damaged but restorable artwork valued in a claim?
Recovery is commonly the lesser of restoration cost plus any remaining loss in value, or the full pre-loss fair market value. The appraisal must therefore establish both the pre-loss value and the post-restoration value, because claiming full pre-loss value for a repairable painting is routinely disputed by insurers.
What percentage losses do appraisers apply to damaged art?
Claims practice uses quantifiable condition discounts: roughly 40 to 50 percent for fading, 25 to 75 percent for canvas lining, 25 to 50 percent for scattered inpainting, 20 to 30 percent for craquelure, and up to 20 percent for repairable rippling, or around 80 percent when it cannot be repaired. Each percentage must be tied to market evidence for the specific artist and work, or it will be challenged.
Which standard of value governs an art damage claim?
The policy's basis-of-valuation clause: often fair market value, sometimes retail value or, for dealers, consigned value plus 10 percent. Applying the wrong standard, such as retail replacement when the policy specifies fair market value, can get the appraisal rejected or the claim repriced.
What if the owner and insurer disagree about a damaged artwork's value?
Fine art policies typically have each side appoint an appraiser and, if they cannot agree, a disinterested umpire determines fair market value at the date of loss from past auction results and private sales. Umpires reject appraisals built on outdated or non-comparable sales, so current, well-matched comparables usually decide these disputes.