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The importance of up-to-date valuations

We live in a world that is constantly changing and so to is the value of our art, jewellery, guns, bronzes, etc that when they are ‘one off’ pieces, often makes their value subjective in the absence of a recent sale, so if you want to receive a ‘fair settlement’ from insurers, it is prudent to have an up-to-date valuation done every 3yrs. Additionally, it will mean you insure on the correct basis from the outset, pay an equitable premium and make the claims process a lot more straight forward.

The principle of an insurance contract is to put you back in the position you were in prior to the loss, known as ‘indemnity’. There are alternatives in the market like ‘Agreed Value’, though these are far less common due to additional work and risk involved from the outset for the insurer. So, how do you accurately arrive at a ‘replacement’ value post loss on a one off item with no other market comparable in the absence of an up-to-date valuation?

Take David Hockney’s ‘Gaugin’s Chair’, it was sold at auction in 1998 for £232k and then 19yrs later in 2017 for a whooping £6.1m – an increase of some 2,600% in under 20yrs. How could this increase be accounted for in the intervening period between sales without professional valuations being carried out periodically? Then there are those family heirlooms which are handed down the generations which were purchased by an ancestor many moons ago leaving even less to go on but guess work to the untrained eye, which in most cases stems from the purchase price decades ago..

The idea for this topic came from an article sent through by Doerr Valuations on one of the most successful and influential living artists of our time, David Hockney, who has a forthcoming sale at Sotheby’s Contemporary Art evening auction in London on February 11. Johnathon Horwich a modern art specialist looks back at how his other works of art have fared over the years. To read the article in full, click here

 


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enquiries@johnsoninsurance.co.uk
01937 222079
Commer House, Tadcaster, LS24 9JF

Johnson Insurance Services is a trading name of Johnson Insurance Services Ltd which is authorised and regulated by the Financial Conduct Authority (FCA) under firm reference no. 784664. Johnson Insurance Services Ltd is registered in England & Wales no. 10822509 at Commer House, Tadcaster, North Yorkshire, LS24 9JF