Fine art is part passion and part investment. Most fine art hasbeen a lucrative investment for collectors in recent years. This isa good time for agents to provide advice to those who may be new tocollecting.

Those who are new to collecting art have greater exposures orlack appropriate insurance coverage that more seasoned artcollectors have. Often, this is because they haven't been educatedabout how to properly care for and protect valuable works.

If you have clients who are new to the art scene, protect theircollections with these four tips:

1. Art Storage and Display

When it comes to insurance, the reasons behind the acquisitionof art do not matter as much as where and how the art is displayed,said Melissa Lalka, worldwide fine arts manager at Chubb PersonalInsurance.

If artwork is hung on an exterior wall, coldness or dampness candamage the piece. Avoid hanging near a heater or fireplace, as theheat causes paint to become soft. Pieces in direct sunlight mayalso fade.

For investment pieces kept in storage, ensure climate control.Canvases become slacker on tighter depending on temperature andhumidity. Lay paintings off the floor and protectively wrapthem.

2. Transportation

Clients may acquire artwork from a gallery, loan exhibit oranother collector's home. “If the piece is highly valuable, butsmall and portable, the client may be tempted to transport thepiece on his own,” said Steven Pincus, managing partner at DeWittStern in New York and director of the firm's fine art practice.

He recommends that collectors hire professional art handlers totransport pieces. Artworks should only be transported byprofessional fine art shippers in air-cushioned,temperature-controlled, fully secured and alarmed trucks. When artis crated for shipment, secure the services of specialized arthandlers to pack up the works.

3. Appraisal

It is also crucial from an insured value standpoint to appraiseart every 3 to 5 years, given fluctuating values. Collectors shouldrecruit the services of an art conservation consultancy toperiodically examine the work for damage, like chips or fading,which can often be corrected.

Also, ask your clients to photograph each piece and preserve allrelated documentation, including provenance and title, in a secureplace such as a safe deposit box. They'll need this information forinsurance purposes if the art is lost, stolen or damaged.

4. Coverage Options

In the event of a loss, art aficionados will want “The Scream”to reflect the Munch painting, not their frustration withinadequate insurance.

Surprisingly, some art collectors believe they have adequatecoverage under their homeowners' policies. Instead, each pieceshould be itemized on the policy or insured under separate“blanket” coverage.

Write coverage on an “agreed value” basis, in which the ownerand insurer consent to the value of a work of art or othercollectible in the event of loss, theft or damage.

This also gives access to an insurer's value-added riskmanagement services, such as infrared home scans to determinepotential hot spots or cold spots, which could indicate potentialelectrical problems that could cause a fire or water leaks.

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ACE: Wealthy Families Have 'Blind Spot' When Protecting Jewelry,Art

High-net-worth individuals have too often neglected to manageand protect their treasures as carefully as they manage theirfinancial investments or businesses, according to a white paperauthored by ACE Private Risk Services and Trov.

“Breakthroughs in Managing Tangible Assets:Completing the Picture of Wealth” presents seven steps foraddressing challenges related to tangible asset management. Theseissues include: determining value and authenticity, keeping properdocumentation, maintaining adequate insurance, and optimizingestate and tax planning.

The study finds that nearly 50% of the homes owned byhigh-net-worth individuals did not have enough insurance to covertheir contents, and the average amount of underinsurance exceeded$415,000 per home.

For more information, read “Many'Priceless' Art Collections Go Underinsured” and “MarketInfluences in Appraising Fine Art” atpropertycasualty360.com.