Niche coverage: How do you insure history?

You can't replace some objects, history center director says

You don’t hear too many insurance jingles offering coverage for a 72-ton antique ammonia compressor.

But a niche in the insurance industry specializes in just such one-of-a-kind requests for both museums and private collectors.

The concept of insuring these items is more or less the same as it is for a house or car. It just might take a little longer for someone looking to cover a Tyrannosaurus rex skeleton or the York County History Center’s ammonia compressor (which was used to make ice in the early 1900s).

Such polices can help the keepers of history recoup the market value of their losses if the unimaginable happens. But, unlike a car or even a house, the cultural value of some items just can’t be replaced.

The Smithsonian vs. Grandma’s antique quilts

Ellen Ross has helped provide coverage for everything from copies of the Declaration of Independence to antique comic books.

As director of the fine arts practice at Arthur J. Gallagher & Co., an international insurance brokerage and risk management services firm, she works with museums and private collectors who own some of the highest-valued art in the world.

How exactly one finds the right coverage for a specific item depends largely on whether that person is a private collector or someone running a business or nonprofit, she said.

Private collectors typically have their assets appraised and base the policy on the appraised value, whereas a museum or historical society would be more likely to seek a blanket policy to cover an ever-changing collection of artifacts.

Some museums, such as ones owned by state governments, might opt to self-insure, setting aside funds to cover disasters instead of paying an insurance company to do so.

Just about anything can be insured, said Andy Enders of Lower Paxton Township-based Enders Insurance Associates.

Enders has helped insure his fair share of unique items, from a room full of guitars to a collection of more than 100 porcelain dolls. While some items might require some digging to find the right coverage — not every company has the expertise to insure, say, an antique toolset — Enders has never encountered a situation where he couldn’t find a carrier for an item.

Issues tend to arise more when someone realizes the sentimental value of a quilt collection or assortment of wines doesn’t match its market value and the cost of insuring it. But if someone wants the peace of mind from getting coverage, a carrier somewhere is probably willing to provide it.

Valuing the irreplaceable

The first step in insuring an item is knowing how much it’s worth — a process that can prove tricky if an artifact or piece of art is hundreds of years old and the only one of its kind.

“It’s difficult for museums because all the insurance company will give us is a replacement value,” said Meegan Carr, director of collections at the York County History Center, which has artifacts illustrating York County’s history from before 1740 up through the present day.

She pointed to a collection of 12 chairs found in one of the center’s historic buildings where, folklore says, Revolutionary War General Marquis de Lafayette once sat.

Still, an insurance company can find a replacement value for almost anything by referencing antiques experts, receipts or auction prices for similar items, Enders said.

The same goes in the art world, where almost every piece is the only one of its kind.

“There’s always something comparable,” Ross said. “You could even place a value on the Mona Lisa.”

That value, however, wouldn’t help a museum replace a priceless artifact. That’s why institutions like the York County History Center also invest in fire alarms, sprinklers, disaster plans and other measures to protect their collections.

As Carr noted, “You can’t replace some objects.”

Jennifer Wentz
Jennifer Wentz covers Lancaster County, York County, financial services, taxation and legal services. Have a tip or question for her? Email her at jwentz@cpbj.com.

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