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Gigantic losses in artworks are being faced by New York Insurers

Records in claims are reported by insurers after Super Storm Sandy hit the US east coast last fall 2012. The Long Island City facility of Gloria Velandia Art Conservation has seen a steady arrival of damaged artworks ever since Hurricane Sandy flooded Chelsea’s art district in New York.
 
Casualties included pieces by Andy Warhol, James Rosenquist, Lucio Fontana and Joel Shapiro, according to Chief Financial Officer SteveLudmer, whose company lists on its website clients including major Chelsea galleries Pace, David Zwirner, Gladstone and Gagosian.
 
Fine art insurers face claims of up to half a billion dollars, their biggest ever payout, to compensate the owners of artwork destroyed when the storm Sandy flooded galleries in New York.
 
Sandy is expected to cost the insurance industry a total of$25 billion, making it the second costliest storm after Hurricane Katrina in2005. Galleries and art warehouses affected by Sandy could be forced to pay upto 25 percent more for insurance after the storm Sandy made records in damage.
 
The storm Sandy killed 132 people as it swept through the north-eastern United States on October 29 2012. It caused enormous flooding in the Chelsea district of Manhattan, where many New York art galleries are located.
 
Art insurers have previously expressed concern that popular art storage warehouses accumulate too much costly artwork in a single location,exposing them to big losses if the facilities flood or catch fire.
 
Art insurance prices have been falling for several years, reflecting stiff competition and a generally low level of claims. Also the art insurance payouts are sometimes lower than the initial claim because of adjustments to reflect the market value of the artwork.