Navigating the Impact of Climate Change on Fine Art Insurance

Climate change has created noteworthy challenges for people seeking fine art insurance. Hurricane seasons have become longer and more intense. Wildfires and flooding, byproducts of climate change, are affecting broader swaths of the U.S. Even areas not historically prone to natural disasters are seeing an uptick in storm-related claims. To create the best possible outcomes for your fine art collection, planning ahead is imperative.

Hotbed zones and impact 

Catastrophic weather events threaten the homes of artists and collectors and can ruin artwork. Unfortunately, homeowners are facing diminishing traditional coverage avenues, leaving their valuable artworks exposed to the unpredictable forces of nature.

For those in catastrophic (CAT) zones, homeowners’ fine art coverage is becoming rarer as weather events like hurricanes, tornados, and wildfires increase. If you can obtain coverage, high premiums and exorbitant deductibles eat into the value of your art investments. We see premiums increasing anywhere from 10% to 50%, and sometimes more.

It is essential to talk with your insurer about coverages related to the types of weather events in your local area. What once may have been a $25,000 windstorm deductible may now be $250,000. Also, you may experience limited or even excluded coverages for perils such as windstorms, wildfires, or earthquakes. 

Some high-net-worth carriers are moving business to their “non-admitted” segments, which gives them rating and coverage flexibility. This flexibility means charging much higher premiums than the standard filed rates and restricting coverages in the most volatile locations. Many standard companies are now out of the market in disaster-prone areas, leaving homeowners without coverage.  

Tighter underwriting standards for fine art insurance 

For fine art in affected areas, underwriters have become more stringent in weighing the risks involved. Depending on the values in question, underwriters may require a physical inspection of your home.  

As a collector, you can mitigate your exposure by hiring a third-party catastrophe team to evaluate vulnerable zones. Or you can tap into your broker’s risk management resources for help to formulate a fine art disaster preparedness plan. This document identifies worst-case scenarios and the specific steps you will take to protect your art in each scenario. The goal: To keep your collection out of harm’s way. Without a detailed plan, some insurance companies won’t offer coverage. 

Keeping your artwork safe from extreme weather events 

While securing coverage is critical, you hope you never have to file a fine art claim. After all, you’ve worked hard to cultivate a collection that has both monetary and personal value.

While your home can resist some of the impacts of a catastrophic event, your fine art needs special attention. These steps can help your art weather the storms. 

1. Create your fine art emergency response plan.

Build a list of art storage facilities and art shippers. Include their contact numbers and hours of operation, and their procedures for storing or shipping art. Identify the appropriate conservators who could provide a restoration estimate for damaged art.

Secure a trusted art handler to pack your art and deliver it to these vendors if you’re out of town. Make sure the art handler can access your property and art. If your home is in a gated community, provide gate access information to your art handler. Also list the handler as a trusted vendor with gate personnel.  

2. Install an auto-activated generator in the event of a power outage.

Many weather events can cause power loss to your home. Exposure to water or high humidity can wreak havoc on many media, including paintings, photography, and bronze and wood sculptures. These generators can keep your systems running to help prevent damage. 

3. Plan for the worst when vacating your home for a prolonged absence.

Move any artwork on exterior walls to an interior, above-ground room, and keep your artwork off the floor. If you live in an area where wildfires are a possibility, we recommend removing your artwork from the home. Smoke, high temperatures, and inability to access your home increase the probability of damage to your artwork.  

Implementing climate controls 

On a related note, conduct climate “due diligence” before loaning or consigning your artwork.

Heat can be a major problem for works of art. With countries experiencing an uptick in major heatwaves, some museums will need to enhance climate control systems. It’s not a given that all buildings have air conditioning. Cold temperatures, too, can contribute to damaged art — pipes freezing, power outages, etc. 

Extreme weather events also underscore the importance of climate controls for fine art storage facilities. Unexpected, long-duration heat waves and related environmental variables call for short- and long-term art storage that can safeguard collections, galleries, or entire museums.  

Protecting art from climate protestors 

When planning a loan or consignment, also evaluate the risks of vandalism.

Climate activists are purposely targeting irreplaceable works of art to draw attention to their message. From protestors attempting to glue themselves to Johannes Vermeer’s “Girl with a Pearl Earring” to throwing mashed potatoes at Claude Monet’s “Haystacks,” these acts of disruption attempt to raise awareness for climate change by capturing the media lens. 

Museums and galleries are walking a fine line between taking steps to mitigate attacks and maintaining public access to art. Institutions can place a work behind UV plexiglass or glaze the artwork itself as steps to deter vandalism. However, you want to weigh the risks carefully before signing a loan agreement. What type of security does the borrowing institution have? Are they screening visitors for cans of soup, spray paint, knives, or other potentially harmful items? 

Preparing with climate change in mind 

No area of the world is immune from climate change. Unprecedented flash floods in New York City and similar extreme weather events are affecting fine art insurance availability and pricing. Stay vigilant regarding weather trends and begin the renewal process early. You want adequate time to pivot if you need new or different coverages.

Have your art appraised every one to five years, depending on value fluctuations and underwriting requirements. Take photos of your art and retain your purchase invoices. And keep these documents in a digital cloud storage folder for easy access wherever you are. 

For those living in identified catastrophic weather areas, you’ll find it difficult but not impossible to get coverage for your fine art. A fine art insurance broker has the expertise to get the coverage you need to protect your well-loved investments.