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Finding the Right Resources to Save on Claims Dollars. Presented by: Patti J. Geolat, G.G., F.G.A., A.S.A., A.R.M, C.I.O.P. Michael Illion. Advisors : Vincent Martin C. Van Northrup Carly Vavrik. 16910 Dallas Pkwy, Suite 204 Dallas, TX 75248 Phone: 972.239.9314 Fax: 972.239.9313

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finding the right resources to save on claims dollars
Finding the Right Resources to Save on Claims Dollars

Presented by:

Patti J. Geolat, G.G., F.G.A., A.S.A., A.R.M, C.I.O.P.

Michael Illion


Vincent Martin

C. Van Northrup

Carly Vavrik

16910 Dallas Pkwy, Suite 204

Dallas, TX 75248

Phone: 972.239.9314

Fax: 972.239.9313

© Geolat 2009


Is the Item Physically Available?



What Caused the Damage and Was it a Covered Peril?

Does Any Documentation Exist?



Covered Peril

Not Covered Peril

Is the Claim Suspicious



Further Investigation May Be Required

Coverage Granted Coverage Denied

Should the Item be Replaced or the Damage Corrected?

Claim is Processed and Closed

Claim is Closed

no the item is not physically available
No, the item is not physically available
  • Documentation to prove existence is vital
    • Sales Receipts
    • Appraisals
    • Warranties
    • Certificates of Authenticity
    • Provenance
    • Repair Receipts
    • Family Photos
yes the item is physically available or documentation does exist
Yes, the Item is Physically Available or Documentation does Exist
  • Confirm the item is actually damaged
    • Seek expert advice concerning the piece to determine the extent of the damage
      • Independent Gemologist
      • Certified Fine Art Conservator
      • Furrier
    • Not all jewelers are gemologists; not all gemologists are independent
    • Art appraisers may not be able to compute damage
    • Not all conservators are certified
common types of claims



Extreme hot/cold



Reckless Display/Disregard

Placed in improper environments

i.e. a piece designed for the interior displayed outdoors

Inherent Vice

Improper Framing

Non archival mats

Frame Breaks

Normal wear and tear misidentified as damaged

In transit

Improper handling



Policy holder generated



Jeweler generated

Jeweler damaged stone while in jeweler’s possession

Normal wear and tear misidentified as damaged

Falsely identified damage

i.e. Natural characteristics in gemstone that can appear as chipped


Left on aircraft

Someone picked up the wrong coat from coat check

Water damage

Freshwater (i.e. light rain)

There are specific ways of drying furs out that may save the item

Freshwater (i.e. heavy downpour, sprinkler system)

Depends upon saturation and length of time item was saturated


Irreversibly damaged



Service no longer available

Normal wear and tear misidentified as damaged

Common Types of Claims
fraudulent claims
Fraudulent Claims
  • Issues not associated with the property
    • Money Trouble
      • Has the client fallen into financial distress?
        • Loss of Income
        • Life Status Change
      • Are they padding the loss to recover more?
  • Issues associated with the property
    • Claimant believes that filing a claim with their insurance company would be easier than attempting to “right a wrong”
      • Item was purchased, then later value and/or quality was found to be misrepresented
      • Client acquired stolen merchandise which has been confiscated by the authorities
        • Knowingly
          • Money Laundering
        • Innocently
          • Purchased or Inherited Stolen Goods
should the item be replaced or the damage corrected
Should the Item be Replaced or the Damage Corrected?
  • Decide whether to engage the artist/designer if still alive or a professional conservator
    • Moral Rights of Artists
  • How much will it cost to fix?
    • Measure the loss
    • Will correcting the damage decrease it’s value?
  • What would be the best solution for the insurance company and the client?
mr jones
Mr. Jones

Mr. Jones recently filed a claim for an original Matisse drawing that had been stolen from his apartment. The value of the item was not documented and he insured it for $60,000 based on his estimation of value. He is up to date on paying his premiums. He has filed the police report and is now waiting for his claim to be processed.

  • Are you able to validate this claim on your own or would there be a better individual to call for assistance?
  • Is there any reason to detect fraudulent behavior?
mr jones outcome and key points
Mr. Jones Outcome and Key Points
  • Since he was renting an apartment, the claims adjustor took a second look and decided to dig a bit deeper to see how this $60,000 drawing would wind up in Mr. Jones’s apartment. The situation was recounted to an appraiser who suspected that it may have been a print and not an original. He photocopied about 10 pieces from a Matisse book of prints and laid the copies out for Mr. Jones. When asked to identify his stolen drawing, Mr. Jones pointed to one of the copies of the prints, worth only about $5,000
  • Mr. Jones believed he had an authentic Matisse drawing, so it is not believed that he was intentionally acting fraudulently
  • Police reports do not determine legitimacy of claims
ms appleton
Ms. Appleton

Ms. Appleton’s dance studio has had a $200,000 steel Wesselmann piece outside of her doors since she opened them in 1982. In 1986, a delivery truck bumped into the sculpture and severely dented it.

  • What would be the best way to go about conserving this item while keeping the insurance company, the client, and the artist’s best interests at heart?
ms appleton outcome and key points
Ms. Appleton Outcome and Key Points
  • Since the artist was still alive, he was contacted to rework the piece which only cost $5,000 including shipping. Another interesting turn this story took was that after Wesselmann had reworked the piece, he personally issued a photo certificate which validated the conservation of the piece; that step just upped the original value of the piece by about 25%
  • Had a local body shop come and repaired the damage, the piece would have lost all of it’s value since it is no longer the original piece from the artist
mrs dart
Mrs. Dart
  • Mrs. Dart purchased a white gold, diamond, and pink coral necklace from eBay for $1,000, which is the amount she had it insured for. A few weeks later, the pink coral split in half. When the insurance company was informed of the loss, they requested an appraisal from an independent appraiser to asses the damage and measure the loss. The two halves of the said pink coral turned out to be nothing but plastic.
    • In what way is your company preventing excessive, unnecessary coverage?
    • Who is responsible for reimbursing Mrs. Dart? The insurance company because she has been paying her premiums, eBay for letting a fraudulent transaction occur, or the seller for knowingly misrepresenting the item?
mrs dart outcome and key points
Mrs. Dart Outcome and Key Points
  • The seller was held responsible for the misrepresentation and returned the $1000 to the client in exchange for the broken piece. Ebay is NOT responsible for fraudulent sales conducted through their website, just as a television network would not be held responsible for airing a commercial for a product that would later be recalled for safety reasons.
what is an appraisal
What is an Appraisal?
  • All appraisals are
    • A professional estimation of the monetary value of an item based on market research for the stated purpose of the appraisal (i.e. Retail Replacement Value, Fair Market Value, Liquidation, etc.)
    • Based on the market at the time of the valuation date
    • Conducted by a qualified individual
  • An appraisal is not
    • A certificate of authenticity or laboratory report
    • An offer to buy

Only real estate appraisers are licensed by the state. Personal property appraisers can choose to become certified by professional associations, although it is not a requirement. All other personal property appraisers assume the title regardless of their certification. Some Professional Appraisal Associations offering certification:A.S.A. – American Society of Appraisers*I.S.A. – International Society of AppraisersA.A.A. – Appraisers Association of AmericaN.A.M.A. – National Association of Master AppraisersN.A.J.A. – National Association of Jewelry Appraisers*Must adhere to Uniform Standards of Professional Appraisal Practice (USPAP) which are mandated by the Federal Government

aren t all appraisals the same
Independent Appraisals


Has no vested interest in the results of the report

Seller Appraisals

Used to justify the retail price

The appraiser is working for the seller which creates a conflict of interest

Aren’t All Appraisals the Same?


Please feel free to include any of the following information in handouts to your clients regarding preservation of their possessions
preservation of artwork

Ideally, keep humidity between 50 and 55%.

Ideally, keep temperature between 68 and 70F.

DO NOT place art objects near humidifiers or de-humidifiers.

DO fit humidifiers and de-humidifiers to the existing heating and air conditioning system to raise or lower the humidity.

Ideally, DO NOT place art works on exterior walls.

Ideally, DO NOT place paintings over a working fireplace.

DO not expose works to heat or air conditioning vents or to exterior doorways.


DO NOT expose work to direct sunlight or high levels of artificial light.

DO NOT use painting lights attached directly to a frame and suspending over the painting.

DO install light diffusing shades or screens on windows.

Ideally, DO close curtains during daylight hours.

DO keep artificial light fixtures far from the work of art


DO have paintings wrapped by a professional art handler.

DO store wrapped paintings from sliding metal mesh racks or in sturdy wood or metal bins.

DO place foamcore or cardboard between paintings.

DO place paintings face to face and back to back.

DO transport works of art by a professional art mover.


DO use “D” rings, mirror hangers, making sure they have an upward bend, attached to side rails.

DO use cork or wood on the back corners of the frame to allow air flow.

Cleaning Front & Back

DO use a camel hairbrush to dust the frame.

DO NOT use a feather duster or polishing cloth to remove dust.

DO occasionally check frame corners for separation.

DO NOT clean painted surface, have this done by a conservator.

Preservation of Artwork
preservation of jewelry
Preservation of Jewelry
  • General Information Regarding Jewelry
    • DO take off jewelry before doing housework or gardening
    • DO remember to clean the back of jewelry as that is where dirt collects
    • DO restring necklaces at least every two years
    • DO knot beads and pearls for protection
    • DO clean metals according to the weakest part of the item
    • IF the piece is composed solely of metal, DO clean with an ultrasonic cleaner
    • DO NOT pull jewelry off by its gemstones
    • DO NOT wear a piece with loose stones until they are tightened
    • DO NOT store valuables in heaps. Wrap each piece individually in velvet, paper or silk
  • Care and Maintenance of Your Diamonds
    • DO use an ultrasonic cleaner.
    • DO use soapy water and a brush to clean under the mounting and between the stones
preservation of furs
Preservation of Furs
  • Hang fur on wide hangers in a large enough closet to avoid crushing garments together
  • Move furs to a professional storage facility during the warmer months
    • Keeping items in an air-conditioned space would not offer sufficient protection from insects or drying out
  • Do NOT store in a humid environment
  • Have furs cleaned and conditioned every couple of years to keep the leather from drying out
    • Drying out of the leather could cause it to crack making the coat more liable to shed
  • If water damage occurs, contact a furrier immediately to asses the damage