What does Art Insurance cost?
The first thing to know is that Art Insurance is hard to get.
Insurance Companies like to deal in large numbers – the premium of many pay for the losses of a few. As a general rule if there are not many potential customers then the Insurance Company can’t make money out of it one loss can wipe out the entire premium pool. That’s the state of play for Art Insurance. There are not that many people (relatively speaking) who need stand alone Art Insurance (as opposed to those that can tuck it under their Home & Contents). What’s the Insurer’s solution – most don’t offer the cover, and the few that do need to charge higher premium to cover their risk.
We put together a deal through London, but it was not easy. We prepared a comprehensive submission on the SMSF market, risks, opportunity etc. Eventually they supported us with a great deal.
The minimum cost of our policy, once you factor in premium, fees and government charges is about $790 +/-, and as far as we are aware that’s one of the lowest in the market. The bad news and good news is that you will probably pay this cost whether you have $1000 of Art & Collectables or $100,000 of Art & Collectables. Basically the more Art & Collectables you have the cheaper the insurance (as a percent of the asset values).
What influences the cost? Type of Asset is important; Asset values are important; but the number one factor determining the cost is Security:
Where are the assets located?
What is the chance that the asset could be destroyed by fire, by water etc
What is the chance that the asset can be stolen
As a general rule, we consider residential homes to be high risk, business premises to be moderate risk and storage facilities/banks to be low risk. The premium is modified accordingly. If you have a high security home (back to base alarm under annual contract; deadlocks on doors, windows etc) then you may be able to move your risk profile down to low risk.
You may well find that the insurance cost (and accompanying storage fees) for an item stored in a storage facility are less than insurance costs from storing it at home (even without storage fees).
Our tip: the cost of improving security around your item will often partially or fully be offset by the saving in insurance premium to cover that asset.
We know that no-one likes to pay insurance premiums, so we try to add value in other ways:
Additional items: if you purchase additional Art & Collectable items throughout the 12 month policy period we can add them to the current policy. This is not automatic and needs Insurer approval, but our experience to date is that typically this won’t cost any additional premium provided that the additional items are less than circa $50k and stored in a similar secure location.
Advisory Panel: As a policy holder arranged through us, you have access to our Advisory Panel. This is a group of SMSF experts available for you to contact for free initial advice in relation to any SMSF related query you may have. All the contact details can be found on our website under http://selfsuperinsurance.com.au/advisory-panel/
Trustee/Audit Insurance: We can offer a significant saving on the standard cost of our unique market leading Trustee/Audit policy (covering costs of random ATO audits, investigations, prosecutions etc). http://selfsuperinsurance.com.au/trustee-audit-insurance/
By the way, Self Super Insurance was in the press. We recently were quoted in The Age, on the pro’s and con’s of Art in your SMSF so check out what we had to say: