(Roughly) Daily

As insurance premiums rise, global warming’s effects are impacting collectors’ bank accounts, especially in disaster-prone states like California and Florida where risky conditions have become the norm…

Art collectors in California, Florida and other states experiencing weather-related disasters aggravated by climate change are finding fine art insurance becoming more expensive, with policies increasingly difficult to obtain (or renew) and containing new restrictions.

Earthquake-prone California, which has faced a series of massive wildfires (often followed by landslides) in recent years, is one epicentre in this struggle to find insurance coverage for homes and the art within them, with the annual cost of homeowners policies rising as much as 40% and the premiums for fine art insurance coverage increasing between 5% and 12%, according to Amee Yunn, assistant vice president of the New York-based Berkley Asset Protection, an insurance company specialising in fine art, jewellery and other high-value, personal and commercial assets. Florida, with its increasingly intense hurricanes and floods, is also a concern for the insurance industry.

“Many wealthy people flocked to Florida due to the pandemic,” Yunn says, “and they took their art with them.” That concentration of wealth assets in areas prone to flooding and hurricane damage creates significant risks to the financial wellbeing of insurance carriers. “We are seeing far more billion-dollar claims now than just 10 years ago,” Yunn says, causing companies like hers to write fewer new policies, increase their prices and add deductibles and exclusions. “The problem is acute.”

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These days, insurance carriers track the advance of climate change as much as environmental scientists. “We have a corporate catastrophe team, which tracks the company’s total catastrophe exposure,” Yunn says. The risks from tornadoes in the Great Plains, hurricanes up and down the East Coast and earthquakes on the West Coast are well known, but the increasing intensity of hurricanes and tornadoes, as well as the rising numbers of them, are alarming signals. The tornado that ripped through Kentucky and several other states last year in a 200-mile path during the unlikely month of December was yet another sign of a climate that is becoming less predictable, as were a series of hurricanes, wildfires and freezing temperatures that have struck in Texas since 2017. In February 2021 a combination of snow, sleet and freezing rain paralysed Texas’s power grid for weeks, causing more than 200 deaths and nearly $200bn in damage.

“It would seem that there is nowhere safe from the effects of climate change,” [senior managing director at Risk Strategies Steve] Pincus says, all of which impacts the fine art insurance world, leading to higher prices and less available coverage…

“‘The only way to stop the bleeding is to stop writing policies’: climate change is making it more expensive to insure art,” from @TheArtNewspaper.

Via @WaltHickey, in his invaluable Numlock News, who observes “Listen, if ‘boo hoo, it’s getting too expensive to insure my vast art collection’ is the thing that gets rich people to actually care about climate change I’m still gonna take that as a win.”

* Adam Smith

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As we ponder protection, we might recall that it was in this date in 1885 that the first issue of Good Housekeeping was published. A “woman’s magazine” (featuring articles on women’s interests, recipes, diet, and health), it is also known for its product testing service and its the “Good Housekeeping Seal”, a limited warranty program that is popularly known as the “Good Housekeeping Seal of Approval.” One of the oldest continuously-published magazines in the U.S., it remains popular in its category.

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