Value Definitions for Claims Settlements How To Determine Value?

What is Current Value? Marks & Signatures

What items are worthy of a Loss of Value? Good repairs vs Bad repairs & LOV.

Art & Antiques: Value & Loss of

Value In the Moving Claims

Industry

Brenda Murray, ISA

At Your Service Appraisals

Which One is Worth More???

An Appraisal is….

• An Appraisal is the act or process of developing an opinion of value, cost, or present worth of forecasted earnings.

• The answer to all settlement issues first rely on the amount an item is worth. From that we determine if R/C are cost effective, A/A, LOV and C/Os.

Appraiser’s Job

• Better serve Claims Representatives by:

– Understanding what makes an appraisal compliant – Knowing what we need in order to determine correct

Replacement Value – Be able to qualify the documents for review – Help those who do not understand the appraisal process – Reduce the risk of making decisions based on faulty value

conclusions – Help with additional services such as personal property

valuation, art advisory, loss of value and claims settlement, etc.

– Save Representatives & Furniture Techs hours of research.

Items To Be Appraised

•Personal Property Items of ALL kinds •Art •Antiques •Collectibles •Luxury Goods •Wine •Jewelry/Watches, Coins/Stamps •Porcelain/Crystal •Even Modern Furniture and Vintage Items •If you need the value of ANY personal property item. •No Homes or Cars

Four Appraisal Organizations

• International Society of Appraisers (ISA)

• Appraisers Association of America (AAA)

• American Society of Appraisers (ASA)

• Royal Institute of Chartered Surveyors (RICS)

Appraisers from these four recognized appraiser organizations are tested and held to ethical standards.

Types of Value for Claim Settlement How do we determine value?

• Replacement Cost

• Replacement Cost New

• Replacement Cost Used

• Reproduction Cost

Replacement Cost

• Replacement Cost is primarily an insurance term meaning the cost to replace an item with another having similar qualities within a reasonable amount of time in the relevant marketplace.

• Example: Peter Max art in the Heart Series

Replacement Cost New

• Replacement Cost New is the cost necessary to replace an item of personal property with a new item of like kind, quality and utility. Considers that items may be upgraded to latest model or style.

• Example: Coach Handbag, Just go to the internet or local Coach store and find a new one.

Replacement Cost Used

• Replacement Cost Used is the cost necessary to replace an item of personal property with an equivalent item having similar appearance, quality, condition, age, authorship and utility.

• Example: Same Coach Handbag, Just go to the internet and searched for a used handbag, especially of the handbag has been discontinued. Condition matters here!!

Reproduction Cost

• Reproduction Cost is the total cost of constructing an exact replica by a qualified artist or craftsman, using the same materials and construction techniques as the original.

• Example: Artistic Bookcase. It might be more cost effective to make a new bookcase than to try and find the same one used or new. Child’s toy chest in oak with letter’s and numbers.

Retail Replacement Value

• Retail Replacement Value is defined as the highest amount in terms of US dollars 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 marketplace. When applicable, sales and / or import tax, commission and / or premiums are included. However, many moving insurance policies do not cover anything other than the item itself.

What do I need from you?

• Has it been appraised in the last 3 years? By whom & what valuation (insurance, market, replacement)?

• Need pictures of the entire item, close up shots of defining details, photos of any markings or signatures.

• Complete description of item with dimensions, material, type, year, etc.

• Any other pertinent information.

• Claim Form, Inventories, Transit Claims Representatives inspection report and contact information.

• Any provenance you may have.

Provenance

Provenance: is the origin and history of the property, such as its past ownership, exhibitions showing the item, literature mentioning the particular property, etc.

•Where was it purchased, when and for how much?

•Who owned it previously? Was it inherited? A Gift?

•What is known about the maker or artist?

•Is the original invoice on file?

•COA (Certificate of Authenticity), Receipts, etc.

Marks & Signatures Matter

• Marks & signatures are Important!! Take photos of them Please!!

• Unmarked items have very little provenance and might be worth very little.

• Boxes, covers and casings are important for value.

Which is worth $600 and which is worth $6,000?

17th-18th C Chinese Famille Verte Qing Dynasty Glazed Porcelain Dignitary Figure

Example of Marks

Possibly a European Mark of a Replica of the 17th C Chinese Figures-Vivian Tong, Sotheby’s Auction House, London, England

Appearance Allowance

• Appearance Allowance is a settlement offered when the damage is not very severe and does not detract from the utility of the object or significantly from its appearance. Usually, repair attempts would not be successful or would be impractical. The owner keeps the item but is compensated monetarily for the damage incurred. An appearance allowance can also be offered when the repair is less than perfect.

• (It is often smart to offer this when the item might be prone to suffer more damage if moved again for repairs. Or if the trip fees and repair costs together are more than the item is worth.)

Loss of Value

Loss of value (LOV) or Diminution of Value (DOV) is the degree to which an item has lost worth because of damage and subsequent professional repair/restoration. Loss-of-value reflects the reduced level of marketplace acceptability of the repaired item. It is the amount a seller would have to discount the asking price of a professionally repaired item in order to induce a sale to a knowledgeable buyer. Mathematically, loss-of-value equals the difference in market value prior to damage and the market value after the damage has been repaired. The most accurate loss-of-value determination is made after repairs have been completed. There is no loss of value chart or percentage that is used. Loss of value depends on the before and after difference in value.

Examples

• Using modern hardware and repair methods.

• Poor restoration/refinishing.

• Unstable conditions.

• The more you change an item from its original condition the more it loses its value. An antique that looks brand new affects the value.

Repairs Determine LOV

Does All Art Appreciate?

• Art is an appreciative item. However, the value of art fluctuates. Current replacement value should be determined periodically since art values change. Many artists gain in popularity while others do not. Economic issues play a large part in the value of art. Art Does Not Automatically Appreciate! It can diminish in value.

Claiming $3,000

Peter Paul Ruben’s The Battle of Anghiari

The first photograph is the claimant’s art. The second photograph is Peter Paul Ruben’s art. The claimant’s art is a canvas painting that is vaguely similar to Peter Paul Ruben’s The Battle of Anghiari. It is not gallery quality nor is it a replica. A replica is defined as an exact duplicate of an original artistic work. Art on canvas replicas of Peter Paul Ruben’s work can be purchased online for $300-$400. There are no amateur pieces available. I will adjust the appraised replacement cost value to compensate for this.

Which is the Original Pablo Picasso?

Le Rêve by Picasso

• The photo on the right is the original Picasso. The original is owned by hedge fund mogul, Steve Cohen and was purchased at Christie’s for $155 million in 2013. You can see from the colors that the one on the left is a reproduction of the original with much brighter colors.

• • Le Rêve is a 1932 oil painting (130 × 97 cm or 51.18” x

38.19”) by Pablo Picasso, then 50 years old, portraying his 24-year-old mistress Marie-Thérèse Walter. Legend has it that he painted the entire piece in one afternoon, on January 24, 1932. It belongs to Picasso's period of distorted depictions, with its oversimplified outlines and contrasted colors.

Kachina Doll or Simon Bull Giclée?

LOV or A/A

Loss-of-value reflects the reduced level of marketplace acceptability of the repaired item. Art, Antiques, Collectables, and other items of high value that might appreciate. Items sought after

Condition Matters

Should a Loss of Value be Awarded?

Helpful Websites

ChandelierSupply.com AntiqueLampSupply.com ChandelierParts.com Gotheborg.com CrystalPlace.com BluebookOfPianos.com-All brands of pianos and their serial numbers NashvillePianoRescue.com/ivory-facts ILoveSteinway.com Put in the serial number and it give you the approximate date.

More Helpful Websites

• GlassLoversGlassDatabase.com • • ArtistSignatureDictionary.com • • ReplacementsLtd.com • • RubyLaneAntiques.com • • GoAntiques.com • • BlackForestImports.com German Clock repair pieces • • MarysGlass.com • • ShopGemstones.com Jades