When the famous abstract painter [Redacted] died in 2025, his market prices jumped 200% overnight. One of my readers owned a large canvas insured for $50,000 (the 2023 value). A month after the death, the painting was stolen. The insurer cut a check for $50,000. The replacement cost was now $150,000. He was underinsured because he failed to update his schedule.
Key Takeaways
- The “Death Effect”: Art values are volatile. Death, major retrospectives, or scandals can spike value instantly.
- 150% Cap: Best-in-class policies pay up to 150% of the scheduled value to account for market spikes. Standard policies do not.
- Stale Appraisals: An appraisal older than 3 years is dangerous. In 2026, many carriers require annual “desktop updates.”
- Premium Savings: Ironically, updating appraisals can sometimes lower premiums if the market for that artist has cooled (e.g., NFTs).
The “Why” (The Trap): The Co-Insurance Penalty
If you are underinsured (e.g., insuring a $100k painting for $50k), some policies apply a Co-Insurance Penalty. This means they won’t even pay the full $50k. They might pay only 50% of the claim because you were only insuring 50% of the value.
However, the bigger trap is simply the Agreed Value Limit. If the policy says $50,000, that is the most you get, period.
[IMAGE: Chart illustrating the “Death Effect” – a vertical line in price history immediately following an artist’s obituary]
The Investigation: I Called Them
I asked carriers how they handle a sudden market spike right before a loss.
1. Chubb (Market Value Protection)
- The Feature: They pay the current market value immediately before the loss, up to 150% of the scheduled amount.
- Example: Scheduled at $100k. Market jumps to $140k. Loss occurs. Chubb pays $140k.
- Verdict: The safety net you need.
2. State Farm (Personal Articles)
- The Feature: They generally pay the lesser of the ACV, repair cost, or the policy limit.
- Example: Scheduled at $100k. Market jumps to $140k. State Farm pays $100k.
- Verdict: You eat the loss.
3. AIG (Private Client)
- The Feature: Similar to Chubb, usually a 150% buffer.
- The 2026 Edge: They offer “Automatic New Acquisition” coverage for 90 days, covering new buys at purchase price even if not yet scheduled.
Comparison Table
| Feature | Standard Floater | Premium Policy (Chubb/AIG) |
| Market Appreciation Coverage | None (Capped at Limit) | Up to 150% of Limit |
| Appraisal Requirement | Every 3-5 Years | Every 3-5 Years |
| Payout Basis | Limit Listed | Market Value (up to 150%) |
Step-by-Step Action Plan
- Set Google Alerts: Set alerts for the names of every artist in your collection. If news hits (death, museum show), check values immediately.
- The “Review Clause”: Ask your broker: “Does my policy have a Market Appreciation clause?” If not, move carriers.
- Digital Appraisals: Use services like Artory or ValueMyStuff for quick checks. You don’t always need a full physical inspection; a “desktop” update is enough to adjust insurance limits.
- Audit Annually: Make January your “Insurance Audit” month. If the market is up, pay the extra $50 in premium to raise the limit. It’s worth it.
FAQ Section
How much does an appraisal cost?
In 2026, a physical USPAP appraisal costs
200−200−
500 per hour. A digital desktop review is often
50−50−
100 per item.
Does the insurance company appraise it for me?
No. They verify your appraisal. It is your responsibility to prove the value.
What if the value goes down?
Report it! Lower your insurance limit to save on premiums. Why pay to insure a piece for $50k if it’s now only worth $20k?