"SANDY" ART CLAIMS COULD HIT $500 MILLION

Dec 27, 2012

By Michael Kramer

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In the wake of superstorm Sandy fine art insurers  face claims of up to half a billion dollars to compensate  owners of artwork destroyed when the huge storm  flooded galleries in New York city.

An industry source says  works  by 1960s graphic artist and illustrator Peter Max account  for the bulk of the loss costing insurers  $300 million.

One underwriter says galleries and art warehouses affected by Sandy could be forced to pay up to 25 per cent more for insurance, and insurers could refuse to cover premises in low-lying areas of Manhattan against floods.

The Chelsea district of New York is  where many art galleries are located. Art warehouses in New Jersey were also affected.

Previous big art losses  include $33 million from  a 2004 warehouse fire in east London that destroyed work by British artists Damien Hirst and Tracey Emin.
In 2006, U.S. casino owner Steve Wynn put his elbow through a Picasso he owned, resulting in a claim of about $40 million.

Art insurance payouts are sometimes lower than the initial claim because of adjustments to reflect the market value of the artwork.

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