Thank you to Private Risk Management Association (PRMA) for hosting a webinar that I led yesterday, "The Art Market, Appraisals, and Insurance: What Brokers Need to Know Now." The presentation was a 50/50 talk, first a bird's eye view of the current art market, then a "nuts and bolts" discussion about some of the most salient aspects of art appraisals for insurance purposes.

A few takeaways for brokers and underwriters:

1. Appraisers whom you or your insureds engage should be USPAP-complaint, competent in the relevant area(s), and ideally hold membership in one of the major appraisal organizations such as the Appraisers Association of America.

2. USPAP (the only appraisal standards authorized by US Congress) comprise a set of requirements and guidelines designed to ensure impartial, objective, independent appraisals, with certain baselines established for diligence, methodological thoroughness, record keeping, ethical conduct, and reporting.

3. There are different types of value. The same work of art will have a different valuation depending on the *type* of value.

4. For insurance scheduling purposes, your insureds should commission appraisals that assess Retail Replacement Value, which is defined as “the highest amount that would be required to replace a property with another of similar age, quality, origin, appearance, provenance, and condition within a reasonable length of time in an appropriate and relevant market.”

5. There is no net relationship between the types of value, especially between Fair Market Value and Retail Replacement Value. This depends enormously on the type of art in question. For some works, the difference between FMV and RRV may be 20%, and for other works, it may be 10x.

6. There is no set timeline for when to reappraise art. This depends on the type of art. For example, a collection of emerging art should probably be considered for reappraisal for insurance purposes more frequently than a collection of traditional American art.