Monday, November 09, 2009

Stolen Warhols valued at $25 million

Occasionally someone else's loss makes us in a peculiar way feel better. What if a thief broke into your home and stole $25 million dollars worth of Warhol silk-screen paintings of one set of a series called “Athletes”. These are portraits of sports icons that were commissioned by you, the collector in 1977 directly from the artist. At the time you paid $800,000 for eight sets. You are mad. The insurance company offers a reward of $1,000,000 for return of your property. Seems reasonable.. Not quite..

One month later the collector cancels his claim and the insurance company cancels the reward. The collector, Richard Weisman, won't return calls from either the media or the insurance company but did give an interview to the Seattle Times and said that the insurance company tries to turn you into a suspect and that he didn't plan on going through all that for three to five years before it settled. By the way there was no sign of a break in and no other art was touched..And one source has said Weisman has been trying to sell some or all of the Warhols for some time. Clearly there is a lot more to this story.

You wonder how often the insurance companies pay off a wealthy client who has deep pockets to fight for breach of contract if the claim is not paid.
The answer, as we say in Texas, is all about bidness and the bottom line is that fraud becomes a line item on an insurance company's budget. This is a cost that is passed to us. No surprise that insurance companies are reporting an increase in fraud during this economic downturn.

You can never stop all fraud but if the insurance companies wanted to get serious about dealing with the problem they could be as committed to solutions as they are in collecting premiums. Maybe agree that any property scheduled over $5,000 must be appraised and photographed by a qualified appraiser and the location of the property must be registered by the insurance company prior to issuing a policy. Now that the appraisal standard of USPAP (see previous blogs) has been accepted, appraisers that are in compliance could impact the fraud problem.

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