Insurance Coverage Appraisals
Having a Replacement Value policy for your unique items, such as jewelry, art, silver, significant collections (particularly if objects are fragile), and important antique and vintage objects is the best way to protect yourself in the event of a loss, and helps ensure that you are neither under- nor over-insured. When you have a Replacement Value policy, your possessions are typically covered for all perils (such as flood, fire, earthquake, theft, etc.) anywhere in the world and with no deductible. It is important that you ask your insurance agent or broker about these points and about other insurance-related questions you may have.
Insurance companies frequently set limits on a certain categories of personal property and require independent appraisals in order for those items to be insured at Replacement Value; these may include antiques, silver, breakables, collections of any kind, jewelry, fine art or any items above a certain value specified on your policy.
For your unique or more valuable objects, an independent appraisal is likely your best protection. Insurance coverage appraisals report Replacement Value, and typically facilitate prompt compensation.
DEFINITION: Replacement Value – Comparable
The price in terms of cash or other precisely revealed terms that would be required to replace a property with another of similar age, quality, origin, appearance and condition within a reasonable length of time in an appropriate and relevant market. [Source: Monograph #2: Types of Value for Varied Intended Uses, American Society of Appraisers Personal Property Committee]
The most common homeowners policies pay only Actual Cash Value/Fair Market Value, which is frequently significantly less than Replacement Value. Do not be caught by surprise. Ask your insurance professional about the limits of your specific homeowners or renters policy coverage in the event that you were to suffer a loss.
Chubb Insurance requirements for appraisal reports can be found here: A Collector’s Guide to Appraisals. This includes a statement that appraisal reports should comply with USPAP.
AXA Insurance Company recommendations for appraisal reports can be found here: Questions to Ask When Hiring an Appraiser.