With nearly 20% of high-net worth individuals having an insurance policy based on a valuation from 20 years ago, underinsurance is a very real problem. Having a correct valuation not only protects you from financial loss in the event of a claim, but also ensures you’re paying the correct amount for your insurance premium. The best way to ensure you have an accurate, up-to-date valuation is to use the services of a professional valuer.
Mark Smith, Managing Director at Quastel Associates, explains what a professional valuation is, what’s changing in the market and why a correct valuation could be the most important thing you have.
Please can you give a bit of an overview and some background about yourself and Quastels?
“So I have worked in the art and antiques industry for about 22 years, joining Quastels around 15 years ago. My job is to look after the lovely team of valuers that we have, covering the whole of the UK. Our valuers all belong to various professional bodies and our fine art and antiques valuers come from auctioneering backgrounds, whether it be Bonhams or Christie’s or Sotheby’s. We’ve got a few more specialist valuers as well, who go out to do things such as classic cars, fine wine, civic regalia, whisky – collectable items. We are lucky enough to be one of the few recognised valuation companies that provide valuations to high-net worth insurance clients, which is where those specialist valuers really come in useful.”
Why is getting an accurate valuation so important?
“Around 80-90% of clients that we see are incorrectly insured, and most of these people are underinsured. Now that could be because someone is using a historic valuation. For example, if someone had a furniture valuation in the early 2000s and has continued to use that figure, they will now be overinsured because the furniture market has gone down. However, the vast majority of people are underinsured. This is for a number of reasons; one of the main ones is that the world of art and antiques fluctuates, trends and tastes change which causes the value of things to go up and down.
“More importantly, when people guess the value of things in their own homes, they often forget about some of the more straightforward things they own. They think about their art and antiques, but it’s hard to get a grasp of everything in their homes; curtains and carpets and their kitchen equipment, for example. Whether because of upsizing or downsizing, the kids leaving home or inheriting things from family, it’s easy to lose track of what you’ve got. That’s the importance of having a valuation.”
Around 80-90% of clients that we see are incorrectly insured, and most of these people are underinsured.
Definitely. So how has the market changed and what trends are emerging?
“I think the interesting one that we hear from almost every client of a certain age, especially if they have antique furniture, is this wonderful phrase of “brown furniture is not worth anything anymore”. To an extent, that is true. All sorts of Victorian, Edwardian, and some Georgian furniture has gone down in value because tastes have changed within the home. People wouldn’t have a huge Victorian dining table anymore, because we have more open plan living, lighter woods and modern styling in homes. Having said that, within the furniture world, there are certain pieces, if they’re in the correct condition, untouched, of the right size, maybe of a recognisable name, that hasn’t gone down in value at all, and possibly has even gone up. So we can’t quite have a sweeping statement about all furniture.
“There’s been a big trend in 20th century art which has had a big jump in the last few years. We’ve seen English artists like David Hockney, Henry Moore, LS Lowry, who have had really big gains in terms of popularity and, as such, are massively underinsured by their owners.
“Modern, contemporary and urban artworks – artists like Banksy – have seen ridiculous gains, changes of 75% in a year for artworks. It’s the art world that has really exploded in terms of trends. Things have certainly changed a lot.”
Has the Covid-19 pandemic affected trends at all?
“The big thing about the pandemic – and this is quite an important thing to note – is people had time on their hands. Secondly, they had nowhere to really spend their money. Lastly, there’s been a huge sea change in the last few years – pushed on by the pandemic – where people have become more confident buying artwork and collectables online. So people who had that disposable income were sitting at home, investing in rare, desirable things and growing their collections. Over the past year we’ve seen record growth in coins, stamps and whisky – those collecting markets that have been pushed on by the pandemic.
“I suppose there’s always an element of people thinking that with what’s going on in the world, things aren’t worth as much. But actually, uncertainty creates trends. The pandemic was preceded by Brexit – you couldn’t have had a more uncertain time than the last 18 months. During a period of worry, people turn away from the traditional safe bets – like property and shares – and invest in things such as gold, or, as I’ve mentioned, whisky – collectables that keep their value. Gold prices are at a high and silver prices are at a 10-year high too.”
Trends aside, are there any categories of items that are always going to be valuable or desirable?
“There are artists who reach a certain level and no matter what happens in the market, they will always be popular. Andy Warhol is a good example – he’s just reached such a stratospheric level. But in terms of everything else in the home, I think it comes down to the magic word of quality. If you’ve got anything that’s really high quality, or rare, it becomes desirable, because it holds value and people collect across different markets. So the rarest works, the rarest coins, the best quality furniture, and the most sought after prints. Those are the things that always hold their own.”
What does a valuation entail? And how can someone prepare for one?
“It depends on what type of valuation you’re having. With a jewellery valuation, a valuer will come to your house and work piece by piece through your jewellery collection. You don’t have to worry about transporting your jewellery anywhere, and the valuer can take a very detailed inventory of the items covering things like colour and type of stones, clarity and carat size. I feel it’s an important one, because it allows valuers to check the condition of clasps and settings to make sure they’re not loose or damaged.
“When it comes to contents or Fine Art valuation, there are a couple of different types. You can have an inventory – this is where a valuer comes in to just do an inventory of the things that are important to you. They might just be looking at your furniture and paintings, for example. Or, you can have a complete inventory of your whole home. That’s really useful as it will tell you exactly what you’ve got and what it should be insured for. In this uncertain world we live in, we’ve all suddenly realised that our health is so important and that we cannot live for ever and I think a lot of people are taking stock of their possessions. So, in many ways, people are having an inventory done because it gives them that great level of detail and reassurance too.
“We also have something called a home contents appraisal. With this, a valuer is not doing a complete inventory, but they’re taking an overview of what all the contents in the home amounts to. It’s useful because people lose track of what they’ve got over time. One of the most common reasons for underinsurance is people forget to include the daily items – the paperbacks on the bookcase, the pots and pans in the cupboard, the clothes and carpets and all those things we take for granted. With a home contents appraisal, you get a professional valuer in your home and they will go around the whole house, assessing what you’ve got. In the end you don’t only get the category breakdown and overall total that you need for your insurance, but it gives you peace of mind. If something does happen and your possessions are damaged, if you have an independent valuation you’re not going to have those arguments with the insurance company. It saves a lot of stress at an already stressful time.”
How often should someone look at getting a professional valuation?
“It used to be every five years, because that tended to be when insurance companies got a bit nervous that the figure was getting old. Now we advise clients to reassess it after three years. But it does vary between clients – for example, if the client has a traditional home where not much has changed or been added, we wouldn’t want them to go to the expense of having a re-valuation three years later to tell them it’s exactly the same. On the other side of that, if the client has a really modern home with contemporary artworks, including, say, some Banksy’s, well we are seeing a Banksy one year for £100,000 and the next year, we’re valuing it at £160,000. Generally, just getting the figure checked every few years is not a bad thing, but it’s certainly not something that needs to be done every year or two.”
What is your favourite thing about working in this industry?
“I personally get most excited about art history. I do some of the research to assist with some of the valuations and I like getting involved with that. Our valuers have often said that the unexpected finds are the most memorable, you know? We go to a big stately home and we discover a Gainsborough or Turner, or whatever it may be, and that’s really exciting.
“But, in many ways, it’s the quieter surprises. For example, when we go to a client’s home, maybe an elderly lady and they’ve said “oh, there’s not very much here really.” Then, when we start the inventory we see a cloth covering her TV unit and when the valuer lifts it up they find this beautiful 18th century chest of drawers worth thousands. But to that client, it’s just her TV table. So, it’s those little things that you see in homes that are the most unexpected. We are very lucky to be able to see rare and amazing one-off bits of artwork or furniture. It’s definitely a position of privilege and one we’re very grateful for.”
To finish, what is your final message to people about why they should have a professional valuation?
“A valuation is something that you will hopefully never need to use. Having one will give you peace of mind and allow you to be correctly insured. But I would say that if ever there was a disaster, it will become the most important thing you could have. A lot of people think they don’t need it as they keep their own inventory and photos – what happens if there’s a fire or flood? Those files have been damaged or lost. Having a full, detailed valuation, stored securely off-site is the best thing you can have in that terrible situation.
“That’s what I love about what we do – we don’t only get to see wonderful things, but there are times when we absolutely make a big difference in someone’s life.”
Find out more about the importance of correct valuation in our guide to underinsurance. For advice and guidance on a range of products to cover your needs, take a look at our personal insurance, business insurance, and landlord insurance services. You can also speak to an expert directly by calling our friendly and experienced team on 01603 218000.
Valuations are not regulated by the Financial Conduct Authority and there will be a charge for independent valuation services. Quastel Associates are members of the Society of Fine Art Auctioneers And Valuers.