Insurance Appraisals 

Insurance Appraisals

All of our Insurance Appraisal Reports are Uniform Standards of Professional Appraisal Practice (USPAP) compliant and written in accordance with the highest standards of our profession.  Every object appraised is thoroughly researched, described in detail and either photographed and inventoried during an onsite inspection or reviewed through the careful inspection of photography supplied to us by insurance companies and/or the clients.  

 

Our Damage/Loss Claim Insurance Appraisal Reports and Insurance Scheduling Appraisal Reports are written in accordance with the International Society of Appraisers (ISA) Appraisal Report Writing Standard (ARWS). 

 

Insurance Scheduling Appraisals typically utilize Replacement Costs*.

 

Damage/Loss Claim Appraisal Reports may use Replacement Costs but, depending on the insured’s policy and circumstances of the claim, we may also look at Fair Market Value, Repair Costs, Loss on Value, Salvage Value, Scrap Value, Original Cost, or other types of costs and/or values based on the needs of the client. These values and costs require research in different markets and will likely yield different numerical conclusions. This information is used by the client and involved parties to help negotiate an equitable settlement. 

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Insurance Scheduling Appraisals For Individuals, Families and Collectors

Our Insurance Scheduling Appraisals ensure that our clients have the right amount of insurance coverage to make them “whole” should their prized possessions become damaged, lost or stolen. Our Insurance Appraisals provide an itemized, photographic inventory of each item with in-depth descriptions and professionally rendered Replacement Costs*. In addition, Insurance Scheduling Appraisals satisfy the burden of proof that the property did in fact exist in the event of a total loss.

We recommend, when possible, that our clients keep an accurate record of their personal property for proof of ownership and original purchase prices.  They should save and store original bills of sale, keep documentation of provenance and prior appraisals and take photos of items with close-ups of condition issues, signatures and makers marks.  These records may someday become invaluable.

In general, Insurance Companies recommend that these appraisals are updated every 3–5 years because markets can change drastically in a short amount of time. 
 

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Understanding Replacement Cost

*Replacement Cost, according to the ISA definition, is an insurance term that means the cost to replace an item with another item having similar qualities, within a reasonable amount of time, in the relevant marketplace.** It is most typically used to identify the amount of personal property insurance to carry for marketable, non-investment property or to suggest the amount of a claim in the case of a loss (e.g. fire, flood, theft and moving damage etc.)

**Relevant Marketplace

When arriving at a Replacement Cost, the appraiser will look to the same marketplace where the owner originally acquired the property.  Was it from a private dealer, a retail store, antique shop, or an auction house? Was the item of local and regional value where the demand is highest or of international interest where a specific country made, sold or prized this type of property? 

Example: How a Relevant Marketing Place Impacts Replacement Cost

We accepted an Insurance Scheduling Appraisal assignment for a small, private fine art collection.

The collector bought most of her pieces at charity auctions and local art fairs. Her average spend per piece was approximately $5,000.  She also purchased two pieces from two different art galleries, one piece directly from the artist and one ceramic sculpture from a freelance curator.  It was the ceramic sculpture purchased at the advisement of the curator, that posed the greatest challenge. 

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Since acquiring the ceramic sculpture several years before for a modest sum, the artist who made it became an international super star in the art world.  Her ceramic sculptures of that size and origin were no longer made and none were on the market. 

In speaking with the curator,  he told us that if you want to buy a piece by this artist you would have to be a respected institution, a prestigious museum or a noted collector.  Not just anyone would be able to purchase a work by this artist.  He said that even if you had $50,000 to spend on one of these pieces to replace it, you could not buy one unless the owner of one of these sculptures was willing to sell it.  Since he knew several people who owned one, he estimated that $75,000 in a private sale would be a sufficient sum to incentivize an owner to part with one of these pieces. After analyzing the current market for this artist, we estimated the Replacement Cost for insuring this artwork was $75,000 because that is the probable amount that a consumer would have to pay to acquire an equivalent sculpture.