Insurance must keep pace with rising art values in Latin America

In recent years Latin America has emerged as a big stage on the international art scene and nowhere is this new found importance better illustrated than Brazilian mining magnate Bernardo Paz’s vast Inhotim modern art museum.

With its 20 galleries and 23 major standalone works, the sprawling 5,000 acre Inhotim is a showcase for major international artists such as Doug Aitken, Steve McQueen, Dominique Gonzalez-Foerster and Anish Kapoor, as well as the home-grown talents of the likes of Hélio Oiticica, Cildo Meirelles and Tugra.

Underinsurance a problem
While great news for Latin America’s profile in the art world, there is a hidden problem when it comes to protecting the values of private collections says Marigaby Mainero, Fine Art Underwriter for Hiscox MGA. “The price of fine art has risen significantly in recent years but many collections are probably underinsured because of a failure to keep up with those rising values. This is a problem in Latin America where specialised fine art policies are not usually purchased, with many relying on their standard homeowner’s policy.”

In turn this could have a reputational impact on regional insurers and brokers says Mainero. “If an individual needs to make a claim and then finds that the sub-limits on their household policy are insufficient to cover their collection, they’ll inevitably blame their insurers and brokers for not providing appropriate cover.”

“We know that collecting art is a real passion for many which only emphasises the need to bring in specialist fine art underwriters, claims experts and adjustors to make sure that a collector’s passion is reflected by the insurance industry’s commitment to protect their art and collectibles with the right products and service,” concludes Mainero.