Carte Blanche recently exposed the growing criminal underbelly of art theft in South Africa, where expensive paintings, drawings and sculptures – stolen from wealthy South Africans’ homes to be sold on the black market – are fast becoming one of the best illicit currencies for organised criminals.
However, with the price of fine and classic art in the country having risen by 28% in the past ten years, Christelle Colman, managing director of Elite Risk Acceptances – a subsidiary of Old Mutual Insure – says that many of the valuable artworks that are stolen are grossly underinsured.
“Too often, local victims of art theft are disappointed to find that the insurance cover they have in place is not adequate for their art collection. This is partly a result of pieces having appreciated significantly in value over time – either upon the death of the artist or depreciation of the rand-exchange rate – but also because many general household insurance policies apply a minimum value limit per item insured and would therefore fail to provide sufficient insurance cover for fine art that far exceeds this assigned value.”
As such, Colman says that catering to the specific needs of high-net-worth South Africans must include access to a panel of experts available to assess the value of their art works. “Something as meaningful as a personal art collection should not be overlooked, and in order to insure the pieces for their correct value and cover options, there are a number of unique factors that need to be taken into account.”
There are also instances where a commissioned piece, that is not yet completed, will have no insurance cover whatsoever, she adds. “Sometimes, individuals will commission an art piece, which usually requires a deposit. In the case that the work in progress gets stolen, or there is damage to the artwork before it is completed, insurance cover will allow clients to recover the deposit put down for the commissioned piece.”
Similarly, she points out that artwork will typically need to be transported from studios or galleries to the individual's property. “What if thieves were to intercept the piece during transit, or if an accident were to occur whereby the piece was destroyed?”
To adequately cover these risks associated with the transit of valuable pieces, as well as the other unique risk factors associated with art, Colman says that specialist cover is no longer even a question for serious collectors. “With art theft on the rise, South Africans need to ensure that their valuable pieces are insured comprehensively and at their current market value to avoid financial loss,” she concludes.