Fraudulent Art Insurance Claims Increase Due To Economy

 


A recent article in the The Art Newspaper, indicates "the number of fraudulent claims is rising rapidly and experts predict they will continue to increase until the economic situation improves."

"According to the Association of British Insurers, in 2008 there was a 17% rise in fraudulent claims compared with the previous year. This amounted to 2,000 dishonest claims made in Britain every week. The total value of these in 2008 was £730m - 30% up on 2007."

"Another common problem is the exaggeration of a work's value when it has been lost or damaged"

This is why the Richard Weisman alleged theft of 11 Andy Warhol paintings, valued at a reported $25 million, has attracted much attention and controversy since the 2009 values would be substantially lower.

Although insured for $25 million, Mr. Weissman has apparently canceled his insurance claim for the 11 Andy Warhol Paintings. In 2007, although Mr. Weisman tried unsuccessfully to sell the Andy Warhol Suite of Paintings for $28 million at an Art Gallery in London, he was still able to insure them for nearly that amount, which raises the question as to who appraised them and on what basis.

"Weisman said he realizes some people might view it as strange for him to walk away from so much money."


"Some insurers regard the discussions with clients over these claims as a "negotiation", others classify the claims as straightforward fraud. Clare Pardy of the firm Ecclesiastical, which insures most of the Anglican cathedrals in Britain as well as major historic homes such as Chatsworth and Blenheim, says "the exaggeration of a claim" is fraud."

"Insurers say the cumulative effect of inflated claims is "enormous", leading to higher premiums across the board. "We aim to make this more difficult by insuring everything on an agreed value basis," says Pardy."

"Most specialist insurers underwrite all art by agreeing a specific value for each work with their client. However, many non-specialist firms group several works together and insure them for a lump sum."

"This can lead to serious disagreements over an object's supposed value when a claim is made on a specific work within the group."

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