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a helpful guide to settling post-disaster insurance claims

If you have sustained a major loss from Hurricane Harvey, Hurricane Irma, or from a flood, tornado, earthquake, or fire, here is a useful guide to follow.

The guide was prepared by Bernice Ross with information from Scott Friedson. Mr. Friedson is a public insurance adjuster (PA) and the CEO of Insurance Claim Recovery Support. Ms. Ross sustained over $100,000 of damage to her house from the Northridge earthquake in 1994.

what does a public insurance adjustor do?

“‘a good PA will be your advocate with the insurance company and will negotiate on your behalf to settle your insurance claim’”

Be safe.

Immediately notify the insurance company that you have a claim.

“By filing your claim right away, you are more likely to settle your claim quickly and to find a quality, local contractor. The sooner your claim is settled, the faster you can get your life back to normal.

“To file your claim, contact your local agent, call the special 800 number the company sets up, log into your online account or visit a mobile claims center.

“Flood insurance is separate from your homeowner’s policy and can be issued through the National Flood Insurance Program (NFIP). If you have purchased flood insurance, your insurance agent will generally assist you in beginning the filing process.

“Unfortunately, if your home was flooded and you did not purchase flood insurance, you have no coverage. Nevertheless, there may be government assistance programs available. Visit DisasterAssistance.gov and FloodSmart.gov. for more information.

“The good news is that if you purchased “comprehensive” coverage on your vehicle insurance and your vehicles sustained flood damage, they should be covered.”

Establish the pre-loss and post-loss condition of your property.

Pictures, videos, documentation.

Know whether your policy requires you to mitigate damages.

To mitigate damage = to take steps to prevent further damage

Find out what the provisions for “loss of use” and “displacement” are in your policy.

When you contract to have work done, it is recommended that you only work with vetted local contractors who are willing to warrant their work.

Examine your policy: Do you have “cash” or “replacement value”?

“cash value” policy – pays on the depreciated value of your property

“replacement value” policy – provides you with the full cost of replacement

Avoid lawsuits.

Avoid bad apples.

See:

“Settling post-catastrophe insurance claims: What agents should know” | Bernice Ross, Inman, 5 September 2017

#Harvey #HurricaneHarvey #Irma #HurricaneIrma #hurricane #tornado #flood #catastrophe #insurance #claims #realestate #art #risk #resilience

 

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“blockage” & the valuation of damage to art for an insurance claim

Ronald D. Spencer, Chairman of the Art Law Practice at the New York law firm of Carter Ledyard & Milburn LLP, addresses the issue of the valuation of loss or damage to art for an insurance claim. He specifically addresses the use of, and questions the appropriateness of the use of, “blockage” and “blockage discounts” as applicable standards for interpreting the loss valuation provisions of an insurance contract.

The insurance coverage amount is the maximum amount the policy will pay. This amount provides the basis for calculation of insurance premiums. Most insurance claims do not involve claims for the full coverage amount.

The methodology used by the insurer to value a damage claim is a relevant variable for the insured. Most art insurance policies are vague, however, on the valuation method, “providing, simply, that in the event of disagreement on the value of the loss, the insured and insurer will each retain their own appraisers, and if the appraisers do not agree on the value of the loss, the dispute is to be submitted to an umpire or arbitrator, whose decision will be final.”

New York’s Bruce Silverstein Gallery suffered loss on October 29, 2012 caused by flooding during Hurricane Sandy. The gallery had an “All Risks Fine Art Dealers Floater” insurance policy with a “Basis of Valuation” provision stipulating that “consigned property shall be valued at the Agreed Net Consigned Value Plus 10%.” The concept of “blockage” was applied by the umpire representing the gallery’s insurance company. This was the first time the concept of “blockage” for art sales, which first arose in 1972 in the context of art valuations for estate tax purposes, was applied to an art valuation for purposes of calculating a loss for an insurance claim.

When valuing the loss of many artworks, the concept of “blockage” values works as they could be sold on one particular date, the date of the disaster (or death, in the framework of estate sales) on which the loss takes place. Blockage discounts the present value of the works of art based on future streams of income from sales over the period of time it would require to sell the art.

The application of blockage is considered to be consistent with USPAP Standard 6 which provides that when a large mass of property is to be valued as of a specific date, the appraiser is required to take into account that the value of the whole may be different from that of the individual parts.

Mr. Spencer observes that “by choosing to apply a blockage discount to an insurance loss valuation, an umpire, in effect, is deciding that the insurance loss should be determined by the price a bulk buyer of the art at the date of loss would be willing to pay.”

He observes, further, that “the art owner should understand that the result of a blockage discount for the owners’ insurance claim is that the more art the owner has lost, the less the insurer will pay per item—the larger the volume of art lost, the greater the blockage discount for each piece.”

See:

“Think Your Art Is Adequately Insured? Here Are a Few Insider Strategies to Help Minimize Your Risk” | Ronald D. Spencer, artnet.com, 8 September 2017

#art #artmarket #artcollections #collectors #galleries #insurance #fineartinsurance #blockage #blockagediscount #risk #hurricane #Sandy #Harvey #Irma #NewYork #Houston #MiamiBeach #appraisals #valuations #finance #tangibleassets #contractlaw

 

 

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artists & collectors: develop a straightforward emergency plan

Develop a straightforward emergency plan. This advice for artists and collectors is suggested by Anne Rappa, Senior Vice President, Fine Art Insurance, with Huntington T. Block, the oldest and largest managing general underwriter of Fine Art Insurance in the United States.

Such plans are created based on very simple pieces of information. Such information includes contact information for conservators and art storage facilities and assessments of needed physical protections. Gather the information together and write it down.

Isaac Kaplan of Artsy writes: 

“Anne Rappa, senior vice president with fine arts insurer Huntington T. Block, urged anxious artists and collectors to look to museums for guidance, namely by developing a straightforward plan—such as compiling conservator or art storage facility contact information and assessing what physical protections are needed for the work. And, she stressed, be sure to write everything down.

“’When you use the words ‘disaster mitigation’ or ‘disaster planning,’ it sounds complicated,’ Rappa said. “But those plans are created based on very simple pieces of information that are culled together and put in one place. It’s the advanced thought that is so important.”

“One simple tip, she said, for artists and art owners facing water damage: Buy some blotting paper.”

See:

“Miami Artists and Museums Brace for Hurricane Irma” | Isaac Kaplan, Artsy, 6 September 2017

#art #artmarket #insurance #fineartinsurance #Irma #HurricaneIrma #Miami #Houston

 

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Irma, Art, & Hurricane Preparedness in “South Florida’s Gold Coast”

Miami and Miami Beach are home to many significant collections of art.

Art Basel Miami Beach, the largest contemporary art event in North America showing about $3 billion in works, has been situated in Miami Beach since 2002.

Some of the works of art are housed in residences maintained in any of the more than 400 luxury condo towers that have been developed since 2011. Some are kept in single family homes. Of course, works of art are also to be found housed in museums, both public and private, and in cultural centers.

Marion Maneker of Art Market Monitor, writing from the 2017 Global Auction House Summit presented by Invaluable, reports:

“At the Invaluable Auction House Summit in Boston, Thomas Burns from Fortress Fine Art Storage and Simon Hornby of Crozier both addressed the problems with hurricane preparedness in South Florida’s Gold Coast.

“Burns says his teams have been working all week to move their clients art into Fortress’s facility and prepare the building for an unprecedented blow. “Starting Tuesday we were inundated with clients who were completely unprepared,” Burns said. It turns out major works are in place without insurance and the insurance companies have placed a moratorium on new insurance in the area this week.

“Fortress has a program that allows collectors to put their works in storage in June when they leave the area. The big question is how many have had their works moved back to the beach houses so early in the season.

“Hornby pointed to the fact that art insurance carriers were slow to engage these kind of hurricane preparedness programs waiting until this Tuesday to call for logistical support. By then, it was already too late to add capacity amid the jammed traffic and fuel shortages caused by the massive evacuation taking place.”

Meanwhile, workers at the Faena Hotel Miami Beach have been working to fortify the bullet-proof glass that protects Damien Hirst’s life-size, gilded with 24-karat gold sculpture of the skeleton of a mammoth. Entitled “Gone But Not Forgotten” (2014), the sculpture was acquired at auction in 2014 for $15 million by Ukrainian-American Len Blavatnik. “Gone But Not Forgotten” was then installed in the garden of the Faena Hotel Miami Beach ahead of the opening of Faena Forum in 2016. Mr. Blavatnik is owner of Warner Music Group and a partner, with Argentine entrepreneur and developer Alan Faena, in the Faena Forum.

Mr. Hirst explains the sculpture of the mammoth as “an absolute expression of mortality, but I’ve decorated it to the point where it’s become something else, I’ve pitched everything I can against death to create something more hopeful.”

“The mammoth comes from a time and place that we cannot ever fully understand. Despite its scientific reality, it has attained an almost mythical status and I wanted to play with these ideas of legend, history and science by gilding the skeleton and placing it within a monolithic gold tank. It’s such an absolute expression of mortality, but I’ve decorated it to the point where it’s become something else, I’ve pitched everything I can against death to create something more hopeful, it is gone but not forgotten.”

See:

“A Miami Transformed by Wealth Braces for the Storm” | Michael Smith and Katya Kazakina, Bloomberg, 8 September 2017

“Irma Threatens Art Spread Throughout South Florida Homes” | Marion Maneker, Art Market Monitor, 8 September 2017

“Culture’s a carnival for opening of dazzling Faena Forum” | Andres Viglucci, Miami Herald, 25 November 2016

“Hirst’s golden mammoth on display at Faena Hotel Miami Beach” | Damien Hirst.com, 8 December 2015

“Len Blavatnik buys Damien Hirst work for $15M at amfAR gala” | Emily Smith, Page Six, 23 May 2014

#Miami #MiamiBeach #Irma #HurricaneIrma #preparations #insurance #art #artmarket #artstorage #FortressFineArtStorage #Crozier #ArtBaselMiamiBeach #Faena #FaenaForum #AlanFaena #LenBlavatnik #DamienHirst #GoneButNotForgotten

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Miami museums prepare as Hurricane Irma approaches

What a month.

Museums in Miami and Miami Beach are taking precautionary measures ahead of the possible landfall of Hurricane Irma.

Pérez Art Museum Miami (PAMM), The Wolfsonian—Florida International University (Wolfsonian-FIU, www.wolfsonian.org), the Institute of Contemporary Arts Miami (ICA Miami), Dimensions Variable, the Vizcaya Museum and Gardens, and Faena Art closed yesterday (Wednesday) and will remain closed through the weekend.

The Pérez Art Museum Miami was designed and engineered to withstand the vicissitudes of extreme weather.

The ICA Miami’s new building, expected to open to the public in December, is also designed to weather extreme storms. The museum “’collection is currently being held in a state-of-the-art storage facility, which also adheres to hurricane codes’”.

The Bass Museum of Art, currently undergoing expansion and expected to open in October, has an action plan to protect the building, the collection, and employees.

See:

“Miami museums hunker down ahead of Hurricane Irma” | Helen Stoilas, The Art Newspaper, 6 September 2017

“Pérez Art Museum Built ‘Like Rock of Gibralter’ for Hurricanes” | Rudabeh Shahbazi, CBS Miami, 9 June 2017

“Pérez Art Museum” | Knippers Helbig Advanced Engineering

#art #museums #Miami #MiamiBeach #artcollections #resilience #realestate #climatechange #climaterisk #HurricaneIrma #Irma #smartluxury