Pamela Pierrepont Bardo
You may have seen our Chicago-based arts and antiques columnist, Pamela Pierrepont Bardo, shuttling between the private clubs and fashionable Chicago and North Shore residences. A former museum director, she’s a certified professional appraiser, and so much more. She is an expert in estate planning and helps people with tax abatement of personal property and safeguarding their assets. She also acts in dissolution of marriage and facilitates charitable gifting. Here she offers her best advice on dealing with your life possessions. She tells you how to acquire, care for, and let go of your valued belongings.
“The mind is like a parachute. It only works when it’s open,” Richard Driehaus of the Driehaus Museum fame once told me. He said open-mindedness was the key to inventing his new products and strategies.
This is also true when it comes to buying insurance for the contents of your home or apartment. You need to debunk your old way of thinking about household insurance. There is general homeowners and tenants insurance and fine arts and valuable articles coverage. Homeowners is “everything that is inside your home or apartment.” This is expensive insurance especially because you and the insurance agent are taking a guess on the cost to replace Burberry raincoats, Picasso lithographs, golf clubs, sporting goods, Cuisinart cookware and a million other items that you would have to replace due to smoke, fire, or flood. Smoke can destroy an original finish to an expensive piece of furniture. Water can warp pieces and separate and discolor veneers rendering them of little, if any, value.
You buy more overall homeowners insurance than you need usually, out of fear of not being covered enough for the things you cannot see or remember. If, instead, you and your appraiser made a list of the things that add up to value or are unique or special and put them on an insurance schedule, placing only the lesser household goods on a general homeowners policy, the premium would drop drastically. Ever think what smoke or water from a worn burst pipe would cost you to replace a dozen men’s business suits or a dozen lady’s fashionable cocktail or evening gowns? These items can be protected and insured by most carriers, if listed.
With homeowners coverage there are broad restrictions such as breakage. While dusting the shelf of Boehm Birds should the glass shelf break, and the birds be in pieces, the loss is not covered by your insurance unless you have asked for the special Breakage Coverage. Other perils not routinely covered by general homeowners is “mysterious disappearance”, “damage by pets”, “spilled wine”, and “worn burst pipes.” Insurers place the limits on silver and jewelry, with a deductible, which you must pay when processing the claim. Homeowners carries a deductible. Valuable Articles Insurance does not carry a deductible.
It is not only less expensive and better coverage to simply purchase a comprehensive valuable articles / fine arts policy – which includes fine quality art, antiques, and anything within the house which is moveable. This is what’s called personal property. (The bricks and mortar of a home is considered Real Property or Real Estate.) Each insurance company and each state is different in their offerings. With some companies, you get discounts for having 24-hour doormen, and fireproofing in the building. Jewelry and silver are covered separately. In Chicago, in 2023, in one of the better agencies, Personal Lines of Willis Towers Watson “Bank Vault In-Out” is offered. This allows the owner to keep the jewels in the vault, notify the company when it will be removed and returned for 1/3 the regular cost of insuring those pieces at home. Other Insurance companies with good Personal Lines Departments are AON and Marsh.
At a prestigious insurance company in town in 2023, the average cost per $100 for jewelry is $1.00 (one dollar). So, the pair of diamond earrings in the photo below costs about $17 a year to insure. If they were insured under the “Bank Vault In-Out” program, the premium per year for these earrings would be a mere $5.66. For fine arts and antiques the cost is only 30¢ per $100 with most carriers in most states. This Art Deco bowl by Gabriel Argy-Rousseau costs only $21.75 a year to insure. Rates differ by state and agency.
Art Deco Bowl, Paris, ca 1925
Some people spend big sums of money on having the contents of their homes recorded on video with the idea in mind that they will have detailed proof of ownership in the event of a loss. The video proves only that an object was in a location at the time of filming. It could be a silver tray left there on loan by your sister from last week’s big cocktail party. The silver tray in the video could be made by any maker of silverplate and not 168 troy ounces of sterling. Is the Picasso print in the background a lithograph, edition of 50, or poster from the MET Bookstore, altering its value many times over? Videos do not prove ownership, quality, or condition at the time of loss.
You think you will use your receipts in the event of a catastrophe with the insurance company, but does your receipt have all the information your insurance company needs to replace an item? Do you have a receipt for everything? Is it current enough? These are all concerns you must take into question.
Through your insurance agency or your building manager, contact a couple of security companies. Interview them. Get opinions on what you need to make your residential contents as safe as possible. It doesn’t make sense to have your valuable articles appraised and insured for a million dollars and have no dead bolt locks on the doors or security system in place. Your possessions are your money.
Remember these things:
- An insurance policy is only as good as what you can collect in the event of a loss.
- To take a tax deduction on a stolen or lost object, it must have been insured at “Full Replacement Value”! There is no deductible. You get paid what is on your itemization or full replacement value.
- Your insurance company will require you to have a professional appraisal or airtight current documentation of your item before they agree to insure it in the first place.
Next month: Read all about what condition means for your personal property.