An Insider Look at the Art Insurance Claims Process

Jan 14, 2020

Whether you just purchased your first major piece, or you’ve spent a lifetime amassing an extensive collection, nothing can prepare you for the devastation of a lost or damaged work of art. Of course, an adequate insurance policy will ensure that you are financially compensated, but collectors often feel a deeper connection to their artworks. Knowing how the insurance claims process works can take some of the sting out of losing such a personal asset, and knowing how to avoid it altogether by taking measures to protect your artwork can save you from both headache and heartache. 

How Claims Begin

Allen Olson-Urtecho is a Renaissance man who has lived in 10 countries and backpacked through more than 80. Olson-Urtecho is also the Principal of a company called Fine Arts Adjusters, LLC, which, as the name suggests, operates primarily as a claims adjuster. When an incident, such as a theft or damage during transportation, occurs, the insurance policyholder files a claim with their insurance company. Olson-Urtecho said, “The process for us begins with an insurance company assigning a claim to my firm, which we acknowledge to have received. We review the literature and contact the insured to set up an appointment to evaluate the damage, which includes taking photos, measurements, asking many questions.” 

Why Claims Are Needed for Art

The vast majority of claims occur when a work of art has been transported from one location to another, whether that’s for an exhibition, sale or storage purposes. Determining who is at fault and, therefore, who has to pay for the damage is tricky business. Olson-Urtecho said, “Based on the art and how it was damaged, we determine the various lines of investigation. This can include a wide variety of avenues, such as determining if the way the art was packed before transportation was up to standard… if the art was too delicate to ship in the first place… if the shipper had correct the specialty knowledge… if the shipping company is at fault or the airline and if are they insured or self-insured, etc.”

However, accidental damage during transportation is not the only reason insurance claims are filed. In his time as an adjuster, Olson-Urtecho has seen a wide range of disasters befall collectors, from theft to house fires to degradation so severe that the living artist declared the artwork to be a total loss post-conservation. He offered these three practical tips:

1.  With the lack of transparency in the art market, it’s important that even when it doesn’t include a monetary transaction, you write everything related to your artwork down on paper and have people sign it. 

2.  Always keep an inventory. It takes only 10 minutes to take a picture of your artwork, scan all of the relevant documents and upload it to a Google Drive folder. You can do all of this with your mobile phone! 

3.  When it comes to storing your artwork, keep it in the box it was shipped in and find a dry place, raised from the ground.

The Aftermath of a Claim

Once a claim has been filed, investigated and the artwork’s owner has been compensated for the loss, Fine Arts Adjusters, LLC goes the extra mile to ensure that all of the collector’s needs have been met. This can include connecting him or her with the right conservator, or in the case of a total loss, making arrangements for the piece to be donated to a local university, where conservation students can use it as a tool for improving their skills. Olson-Urtecho said, “It’s very important to understand that people have an emotional attachment to art and to be empathetic to the insured.”

When Claims Reveal Fraud

This, of course, does not apply when the insured is trying to commit fraud. Prior to the founding of Fine Arts Adjusters, LLC, Olson-Urtecho was a federal investigator working in Washington D.C. Because of his personal history in and passion for fine art, he enrolled in a specialized art crime summer study program in Italy and upon return, was thrust into a case that was receiving national coverage, involving the theft of a large art collection. He said, “I was brought in by way of the insurance company’s law firm to investigate the art and the testimony of the victim. To make a long story short, I was able to prove with evidence that all the stolen art was made up of forgeries and that the victim was not much of a victim.” 

This experience led to the creation of Fine Arts Adjusters, which also provides authentication research to its private customers. He said, “We follow a code of ethics rarely seen in the art world. We are very objective in our process. We are going to tell you if you have a problem or a forgery, or have been victim of a crime. At Fine Arts Adjusters, we believe in honesty and fairness. You do not have to like us, but you will like our work.”

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