Art owners planning to ship their valuable belongings know that art shipping insurance is the core protective layer for their financial interests. However, there are many misconceptions about the declared value vs. insured value in art transport. Let’s examine their differences and the implications of indicating the wrong value in your insurance policy to inform wise shipping planning.

Declared Value vs. Insured Value in Art Transport

The terms are often confused because they both relate to the art object’s value. However, these two indicators serve different purposes in shipping arrangements. The artwork’s declared value represents the sum that the owner names to the shipping carrier for an accurate calculation of liability claims in case damage occurs in transit.

The industry standard is to cap liability at declared value or its fraction, setting a maximum compensation ceiling. However, this ceiling is not a guarantee of getting the full compensation for damage, loss, or theft. 

The insured value of the artwork represents the value covered by the insurance policy, which the art owner either purchases from a third-party insurance broker or gets from the carrier. It is the sum the art owner will get in case their damage or loss claim is satisfied, and this compensation calculation is more accurate and guaranteed. The insured value represents the sum that the art owner and insurer agree upon, relevant to the present-day fair value of the artwork in the market.

Insurance Implications for Art Transportation

The two types of artwork value work differently in art shipping practices, and the choice of either a general-purpose carrier or a specialized art shipping company determines which value your shipper will accept for coverage. While a shipper like FedEx or DHL can offer a declared value compensation cap of $200,000 - $300,000, the actual compensation can be way lower because of minor exclusions in terms. Fine art insurance companies provide full agreed value coverage by securing the artwork’s full value.

To recap, the declared value vs. insured value in art transport works as follows:

• Declared value is set by the shipper to limit their liability. It usually comes at a low fee but has no payout guarantee.
• Insured value is set by the insurer together with the shipper and guarantees payout. It requires a premium payment.

As you can see, specialized art insurance costs more, and the art owner should be ready to go through the appraisal and provenance verification process to get that insurance approved.