Research: High net worth collectors are concerned their art and collections are underinsured

With rising inflation, price fluctuations are a key concern for wealthy individuals. The survey of 250 UK HNW individuals who invest in art and other collectibles found three in five (60%) are concerned about increases in values of their assets.

Three quarters (76%) of those surveyed said the value of their art and collections has increased during the past 12 months. Three quarters (76%) also expect the value of their art and collections to increase further during the next year.

Having regular valuations to keep pace with value fluctuations is essential. The research discovered over half of HNW collectors say they have at least one collection appraised annually. However, 5% admit they have their art and collections valued more than every five years and 4% do not get their collections valued at all.

Collections are most commonly valued by an independent professional or registered valuer (86%) and most likely for insurance purposes (69%). However, two in five (37%) of those surveyed said they have a probate valuation and over a third (35%) reported having a high auction valuation.

Ecclesiastical is encouraging brokers to speak to their clients about the importance of regular valuations to ensure they have the right cover in place.

The specialist insurer recommends HNW clients should review their sums insured annually. Under the Ecclesiastical Art and Private Client policy, clients with professional valuations less than three years old at the time of loss benefit from extended replacement cover, meaning the insurer will pay the value of the item at the time of the damage even if this is more than the value shown in the valuation.

Dr James Lindow, Underwriting Director for Art and Private Clients at Ecclesiastical, said: “Underinsurance has always been an issue in the high net worth sector, but now, with continued high inflation, it’s more important than ever that brokers are speaking to their clients to about the importance of regular valuations. Our latest research has found the majority of high net worth collectors are concerned their art and collections are underinsured. Wealthy individuals should review their sums insured annually to ensure their possessions are insured correctly. Brokers play a vital role in ensuring their clients have the correct cover in place.”

Last year, Ecclesiastical launched an enhanced high net worth home insurance product that includes cyber damage, cyber-crime and online liability cover as standard, and optional additional covers including business cover and travel insurance.