Tag Archives: valuations

What is a valuation

What are valuations and why do you need one?

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Jewellery Specialist Francesca Orme recently sat down with Alastair Meiklejon, Senior Valuer at Doerr Dallas Valuations, to discuss why valuations are so important, how underinsurance happens, and what clients often overlook when it comes to protecting their collections and contents.

Francesca:
A lot of people hear the word “valuation” and immediately think about selling something. What actually is a valuation, and what kinds of valuations do you carry out?

Alastair:
There are many different types of valuation, all carried out for different purposes. We undertake insurance valuations, probate and inheritance tax valuations, family division valuations, and valuations for estate planning and collection management.

The type most people are familiar with is an insurance valuation. That establishes what it would realistically cost to replace an item today if it were lost, stolen, or damaged.
Clients often come to us because they have acquired items over many years, inherited pieces from family members, or simply want to understand the value of what they own.

A valuation provides the client with proof of ownership and value – in the event of a claim a client will be asked to provide this and often receipts or evidence is not possible.  Valuers cannot value items when they are no longer available, even from photographs.  A valuation will be the most important document when dealing with a claim.

Francesca:
I think a lot of people ask why they need a valuation if they are not selling anything.

Alastair:
Absolutely. It’s a very common question.

One of the biggest reasons is insurance. Without an accurate valuation, clients often have no idea whether they are properly covered. If you have never had a valuation I would at least have one completed a some point to provide you with a detailed description, photographs and a value.

But beyond insurance, valuations also help people understand what they actually own. You would be surprised how many times we visit a property and the client underestimates both the quantity and value of their contents.

It also becomes very useful later for family planning, inheritance discussions, gifting, and understanding how collections may eventually be divided between family members.

More than $80 trillion will be transferred to heirs from Generations X, Millennials, and Gen Z over the next 15 years, according to the UBS Global Wealth Report 2024.

Some experts, such as former UBS banker Ken Costa, estimate the figure could be as high as $100 trillion.

When client ask if they need a valuation, I would always ask them if they can afford not to. In the event of a claim it will ensure a speedy payout and a payout at the true value.

Francesca:
And values can change dramatically over time, can’t they?

Alastair:
They really can. Markets move constantly. Material prices rise, tastes change, and demand changes.

Silver is a very good example. Precious metal prices have increased significantly, which directly impacts replacement costs. But insurance valuations are not just about the raw material value. We look at what it would realistically cost a client to replace an item through an appropriate retail source today.

That’s very different from an auction value or probate value.

Francesca:
So the same item could have different values depending on the purpose of the valuation?

Alastair:
Exactly.

For insurance, we are assessing replacement value. For probate or inheritance tax, we assess open market value. Those can be very different figures.

Francesca:
One thing we speak about a lot is underinsurance. Why is it such a problem?

Alastair:
Because many people are relying on figures that were guessed years ago and simply index linked over time.

We still see clients who say their contents figure was originally decided ten or fifteen years ago with very little detail behind it.

The problem is that collections evolve, property contents change, and prices increase. Without reviewing those figures properly, clients can find themselves seriously underinsured.

78% of clients we visit are under-insured and many of these have inherited items in the last 10 years totally unaware of the values and often items sitting in the back of a safe or drawer. 

Francesca:
That’s where a Walk Through Valuation can be really useful, isn’t it?

Alastair:
Very much so.

A Walk Through Valuation allows us to review the property room by room and assess whether the current insurance figures are realistic.

We look at categories such as fine art, jewellery, silver, ceramics, glassware, furniture, and general household contents. We also review garden contents, outdoor furniture, and outbuildings where appropriate.

The aim is not to specify every single item individually. It’s to identify areas where the sums insured may not be sufficient and highlight important items that may need separate specification on the policy.

Francesca:
And it’s not just jewellery or paintings people forget about either.

Alastair:
Not at all. One of the most overlooked areas is general contents.

People naturally focus on jewellery, watches, or artwork, but the cost of replacing everyday household items has risen hugely in recent years.

Curtains, carpets, furniture, appliances, and outdoor items can represent a very substantial replacement cost.

Water damage is another major issue. People often think about theft or fire, but escape of water claims can be catastrophic.

A leaking boiler or burst pipe can destroy flooring, furnishings, carpets, and decoration throughout a property. We have seen many situations where clients simply did not have adequate cover in place beforehand.

Francesca:
Do valuations ever uncover surprises?

Alastair:
Quite regularly.

One example that stands out involved a coin collection. During what started as a fairly routine review, we identified an item of significant value that the client had completely underestimated.

That discovery ultimately helped fund university education for the client’s daughters.

Those moments are always rewarding, but they also reinforce why specialist expertise matters. Clients are not expected to know exactly what they own. That’s our role.

Francesca:
And sometimes that means bringing in additional specialists?

Alastair:
Exactly.

One of the most important parts of being a valuer is recognising where specialist input is needed. At Doerr Dallas Valuations, we have specialists across jewellery, watches, fine art, silver, books, Asian art, and many other fields, so we can ensure significant items are assessed correctly.

Francesca:
Finally, what would your advice be to someone who has never had a valuation done before?

Alastair:
Don’t assume your current insurance figures are accurate just because they’ve been on the policy for years.

Values change, collections grow, and replacement costs rise over time. A valuation provides reassurance that if the worst happens, you have appropriate cover in place and a proper understanding of what you own.

That peace of mind is incredibly important.

If you would like advice on insurance valuations, probate valuations, or Walk Through Valuations, contact the team at Doerr Dallas Valuations.

 

If you would like advice on insurance valuations, probate valuations, or Walk Through Valuations, contact the team at Doerr Dallas Valuations.

Watch the interview in full:

Chatbot valuations

AI Chatbots in Valuations: What Collectors Need to Know

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“But ChatGPT told me my vase was worth £100,000!”

Sound familiar? As a professional valuer, the most common question I receive from clients after submitting a valuation is why my analysis differs from what they found on an AI chatbot.

With the rise of artificial intelligence (AI) over the past five years, the landscape for technology as we know it is rapidly evolving, affecting every industry, including valuations. These days, it is very difficult to escape AI; many use it without even realizing (even a simple Google search uses AI to produce the Gemini summary that appears at the top of the results page). The art market has picked up on this, as is reflected in the recent surge of art tech startups that have emerged post-pandemic. In the valuations field, there are three primary areas heavily incorporating AI: databases for auction results (Artnet, Artprice, MutualArt, etc.), reverse image searches, and, lastly, the (in)famous(?) AI chatbots. Each category deserves its own article, but AI chatbots tend to cause the most confusion, so they will be my focus here. There is currently very little literature on the use of AI chatbots for personal property valuations, especially from the perspective of a valuer.

Why Are AI Chatbots Important?

It is crucial to first briefly outline how AI chatbots operate and what makes them so influential. AI chatbots are having an astronomical impact in reshaping the way users approach research. Nearly 30 years ago, Google and other search engines were revolutionary in collecting and presenting information in an organized format. Fast forward several decades, AI chatbots now go a step further to synthesize collected information by reading its contents for us and summarizing them so that users aren’t required to reference the source material at all. For simple tasks, this can suffice, but for more complex work such as valuations, confusion and errors often ensue when there is no human input to verify AI’s work.

Why do AI Chatbots Make Mistakes?

There is a misconception that because a computer generated an answer, the answer is objective and consistent, but AI chatbots are the first to remind users of accuracy disclaimers. The reality is that chatbots are as accurate as the people who programmed them (these people are not art valuers!), and much like individuals, no two chatbots are the same. This means that when asking multiple chatbots the same question, they will often produce entirely different answers, ranging widely in accuracy. Chatbots are programmed to have different strengths and weaknesses depending on what their programmers prioritized, and some will not engage with valuations at all, (quite wisely) redirecting the user to professional valuers. As a professional valuer, I would even be wary to claim that there is one AI chatbot best for art historical research because the technology is shifting so swiftly that within a week of publishing this article, a recommendation may already be out of date!

When clients ask me about AI chatbots, here is my advice:

Why AI Chatbots Can’t Replace Valuers:

Basic object identification:

For very common household items or famous works of art (think Van Gogh or Picasso), AI chatbots can often correctly identify photographs. However, the moment the artist or subject matter becomes any more obscure, roadblocks begin to appear. As an Asian art specialist, I frequently find that clients misidentify their objects because a chatbot couldn’t correctly identify the materials, country of origin, religious subjects, etc. These tend to be mistakes that human specialists (who identify objects for a living) can remedy immediately.

Dating:

By far the most common issue I encounter with clients is that an AI chatbot told them their object was an antique, when it is in fact a Modern or Contemporary reproduction. The main reason for this error is that chatbots heavily rely on textual information for dating objects, so visual analysis receives little (if any) weight. Some chatbots now provide elementary visual descriptions, but their detail and accuracy are inconsistent and fall short, whereas professional valuers are expected to do both. For Asian antiques and other specialties, this type of error can be detrimental in determining a value.

Comparables:

As mentioned above, AI chatbots are not advanced enough yet to accurately visually analyze a single item, let alone visually compare multiple items, which is a crucial step for selecting appropriate comparables. Chatbots usually rely on text alone, which is insufficient for comp selection; a set of human eyes is required to make this call. AI chatbots may be able to locate links to sales of objects with the same text description, but these often look nothing alike. This type of mistake can be disastrous when chatbots rely on sales data from the wrong comparables to determine the value of an item. Additionally, AI chatbots exclude offline comparables that professional valuers know how to find, which can be crucial in valuations. Mistakes tend to be even more severe for specialized objects.

Market analysis:

Market analysis can be accurate for Contemporary blue-chip artists or other household names, but only for their general market trends, with no further nuance. As expected, for many specialist areas, the technology is not yet robust enough to provide accurate market analysis conclusions. This is due to the lack of visual analysis, chatbots not searching for sources in the correct places, or the inability to analyze results. Collectors still need a professional valuer or advisor to make accurate judgments.

Values:

The above elements all contribute to the value conclusion of an item, and if these steps of the equation are incorrect (which they often are!), there is little chance of accuracy in determining values. Even when these aspects are correct, AI chatbots are not equipped to weigh the nuance of each component.

Not knowing the right questions:

The answers from AI chatbots are only as good as the questions they are given. Collectors often (understandably) do not know which questions to ask, resulting in less helpful AI output. Professional valuers do not need AI chatbots, but if we did choose to consult them, we would produce more helpful information because we have the academic specialism and the professional experience to anticipate the types of queries associated with each type of object. Often, clients receive the wrong information because they do not have the baseline knowledge to use AI chatbots as an effective research tool.

It’s Not All Bad: Pros of Using AI Chatbots:

Object identification for very common objects:

As previously mentioned, very common objects with a large internet presence are usually retrievable on AI chatbots.

Historical information:

For casual research, AI chatbots can be a great way for collectors to learn more about the history of their items.

Signature recognition (sometimes!):

AI chatbots can sometimes help decipher sloppy handwritten signatures. They are not, however, authentication tools, and the AI suggestions given are merely possibilities for what the signatures might say.

Language translation of clearly printed materials:

For modern, clearly printed texts, AI chatbots can sometimes identify the language used or give the user an overall gist of a text, akin to using Google Translate. This usefulness evaporates immediately when applied to handwritten or antiquated texts. As an Asian art specialist, I frequently encounter clients mistranslating texts found on antiques, especially with calligraphy. A professional valuer and/or translator is always necessary to ensure accuracy.

Will AI Chatbots Replace Professional Valuations?

Not anytime soon, and it is currently difficult to imagine a scenario in which AI’s capabilities outperform professional expertise, especially in specialized areas. AI is a tool, not a decision maker. Much like Google, AI chatbots are a fantastic resource for collectors to use for casual interest, but, due to their limited research capacity, frequent errors, and lack of nuance, chatbots are not suitable for valuations and should never override a professional opinion. AI also cannot be held accountable for its errors, whereas professional valuers undergo rigorous training and adhere to strict ethical guidelines that ensure accuracy and responsibility. As a result, insurers, governments on both sides of the pond, and arts institutions reject AI-generated valuations in favor of professional ones, and with good cause.

Although my initials are AI, rest assured my valuations are anything but artificial. If you are searching for a professional valuation, Doerr Dallas is here to help!

Disclaimer: This article reflects current technology and valuation practices as of September 2025 and may not apply in all jurisdictions.
Contents Insurance

General Contents – The invisible problem

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Back in 2022, I wrote an article that quickly became one of the most read pieces that I had created up to that point and it focussed on what I believed to be a hidden problem in the world of insurance – the things that clients and brokers overlook – the hidden general contents.

In the three years since then, you would be amazed how many conversations I have had with brokers about washing machines and carpets – it is not what I would describe as the glamorous end of what we do as valuers, but it is of such importance that it really needs to be at the forefront of people’s minds when correctly insuring a property and its contents.

Back in 2022 we saw what can only be described as an astonishing increase in the cost of goods and services, and according to the office of national statistics a 16% increase in the cost of furniture over the 12 months previously – meaning that a £10,000 settee bought in 2021, would now be £11,600 just 12 months later. 

This surge in furniture costs was driven by a combination of factors that all collided at once. Supply chain disruptions from the pandemic were still causing delays, raw material prices were climbing, and labour shortages meant longer lead times and higher production costs. On top of that, a shift in consumer behaviour saw people investing more in their homes, with demand for larger, more comfortable furniture increasing as remote working and home entertainment became the norm. Retailers, faced with rising expenses and strong demand, passed these costs onto consumers, resulting in the sharp 16% rise. While inflation has eased slightly since then, the cumulative effect means replacement costs today are far higher than most people realise.

Where we are at in 2025 isn’t quite as bad, but cumulatively that same settee would be close to £15,000 now after the past few years increases reducing to around 2.5%. However, there was a peak at the end of 2024 – so it is unknown where this could head.

The forgotten items are always the same pieces, from 2022 – to now. Whilst we all remember the £5,000 painting that we bought, the name of the gallery and we have probably tracked the increase in value of the artist – maybe in a little file of ‘important things’. What most of us have not done is looked at a similarly priced pair of curtains and thought about what they would cost to replace….to be fair it isn’t on a list of ‘exciting things to do at the weekend’ is it?

One of the major misconceptions that many clients still have is that they don’t need to have a valuation, because they last purchased anything new in 2003 and they would do things completely differently now if they had to redecorate…..however….whilst this may be true, it is in fact the exact reason why they need to have an up to date valuation completed.

In the years since the end of lockdown, so many new standard ways of living have emerged. For example, the first year encompassed the “I must not let go of my lockdown hobbies and ways” period, meaning that £2,000 bread maker was still being used weekly, as was the kiln for your newly found love of studio pottery, but most likely it was the newly built summer house where one of the family spent a significant amount of the year, usually with a very large television, and a bar. It’s actually quite frightening how common it is for these additional parts of the property to be excluded from the schedule and usually at best there is a small amount on the policy included for their general contents.

In addition, the shift to remote work has brought an increase in home office setups, which often involve high-end furniture, equipment, and technology. These items are frequently overlooked when it comes to valuations but can significantly affect the overall value of your contents. As more people continue to work from home, ensuring these assets are properly covered is essential.

There has of course been “Cluttercore” which, don’t laugh was an actual thing…..Walking into someone’s house where a single wall may have had 30 pictures all intricately squeezed in isn’t uncommon, and suddenly a grandmothers antique frog collection from the 1920s needs to go on display.

Whilst the future of TikTok has been in jeopardy of late, the one place where it has always been at the forefront is convincing people that they should paint their own furniture, stain their own curtains and generally create many houses full of unfinished projects – (don’t ask my wife about the outhouse full of chairs, it’s a work in progress) which in turn has created houses of ‘things’ which has been a big change to the ‘minimalist’ ways of living for the last decade or so, and personally I am a fan, I like to know that I can find a pasta pan without having to drive to the storage container.

One of the biggest things that I have seen a rise in is subscriptions. Whilst most people reading this will have enjoyed Netflix for a few years before 2020, what one couldn’t envisage was the template of subscriptions to be copied over into many more areas; books, food, plants, clothes and many more which of course have not been included in recent valuations or schedules.

House Contents Insurance - Corner Sofa

One of the biggest areas that have changed is the “massive settee that you can fit nine people on” trend that seems to be occupying the country, before when a quiet farmhouse in Wiltshire was happy with the three red leather Chesterfields that had been there since the 1980s, it was clearly the right time to replace with a corner unit where a family could literally eat, sleep, and watch previously mentioned Netflix subscriptions.

Meanwhile, another often-overlooked asset class is memorabilia. With memorabilia auctions on the rise, the value of collectibles – from sports items to historical artifacts – has seen dramatic increases over the past 12 months. We’ve seen the auctions of Freddie Mercury, Vivienne Westwood, Mark Knopfler and Nigel Mansell, to name a few in the past 18 months. If you have any memorabilia, now is the time to review its current worth, as it may have appreciated substantially in a short time.

So hopefully a few of these examples might convince you that you or your clients are long overdue a valuation – we won’t judge, unless that corner unit has a built in fridge and drinks holders, that is.

To arrange a valuation of your house contents, call us on 01883 722736 or email us on [email protected].

dealing with art and chattels on divorce

A fine art: dealing with art and chattels on divorce

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It is often claimed that London is the ‘divorce capital’ of the world. The city also plays an important role in the global art market, being home to world-famous auction houses and galleries.

It is not surprising therefore that the division of art collections increasingly crops up  within the context of divorce proceedings. Over the last 10 years, diverse investment portfolios are more likely to include tangible assets such as art, wines, watches and jewellery. The valuation of such items can be difficult however and the division between a couple in the event of their divorce can be contentious.

Valuation

Valuation is a central issue in most divorce cases. The family courts need to calculate the assets in the case and categorise them as ‘matrimonial’ or ‘nonmatrimonial’. Only once the valuation exercise is complete can the parties (and the judge) turn their minds to considering the division of the matrimonial assets between the couple (and if  necessary invading the ‘non-matrimonial’ property) to effect a fair financial outcome.

The court can sanction the instruction of an expert within matrimonial proceedings under Part 25 of the Family Procedure Rules. The benefits of expert valuations are that they can:

  • Provide a clear understanding of value and can prevent heartache, arguments and expensive legal wrangling.
  • Support compliance with the financial disclosure required by Form E and each party’s duty to give full and frank disclosure of their worldwide assets.
  • Help to minimize conflict, so all parties are using the same figures when entering into negotiations.
  • Help both parties find a fair and informed division of the assets once values are understood.

The expert owes a duty to the court to help on matters within their expertise. This duty supersedes their obligations to the paying party so their report can be truly independent and reliable.

The letter of instruction to an expert is a vital document. It needs to clearly set out the relevant background and to ask the right questions. Key considerations for instructing an art expert include:

  • Individual pieces vs a collection

Valuing a single piece of art may be easy. But what of a collection? The expert needs to know if they are valuing the collection as a whole or the individual pieces. A well curated collection may be worth more than the sum of its parts, and this value needs to be accurately recorded. In the case of a large collection being sold, the total price achieved can often far exceed presale price expectations. Factors in this are varied but with art, the price achieved is linked to the quality, breadth and date of the works in the collection and also the profile of the owner in the art world. A good example is the recent sale in New York of the Macklowe collection of contemporary art. The sale came about as a result of a very high profile, acrimonious and long running divorce battle in the courts between Harry and Linda Macklowe. The disagreement reached a stalemate, which was ended by a judge declaring that the art must be valued and then sold by public auction. The works were spread over two major auctions in New York in November 2021 and May 2022. Every single lot sold and the total of $922 million became the highest total ever achieved for a private collection at auction.

Purpose of Valuation

The purpose of the valuation can also impact the value. A valuation which assumes a fire sale may differ markedly from a considered sale over time. This may differ again from a value for tax purposes, insurance or probate. For the purpose of valuation for matrimonial proceedings, the value level required is referred to by the courts as ‘fair market value’ and is defined as:

‘the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts’. ‘the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts’.

The Court’s Approach

The court starts with an assumption that assets generated during the marriage, which are considered ‘matrimonial’, should be shared equally. These sharing claims are cross checked against the parties’ financial needs, which are assessed in the context of the couple’s standard of living during their relationship and all the available resources. If required to meet their respective income and housing needs (and those of any children), one spouse may be awarded more than 50% of the ‘matrimonial’ assets, or potentially even a share of the other spouse’s ‘non-matrimonial’ assets.

The categorisation of assets as ‘matrimonial’ or ‘non-matrimonial’ is not straightforward. An artwork purchased during the marriage by the couple together using their joint funds is almost certainly ‘matrimonial’ whereas an inherited piece kept in storage paid for by one party from their own funds is most likely ‘non-matrimonial’. But the court will also have to grapple with the less clear scenarios – perhaps a piece purchased by one party with their sole funds during the marriage, or an inherited work declared to have been gifted from one spouse to the other.

The division of chattels, particularly artworks, between the couple on divorce can be particularly challenging. One spouse may connect with a certain piece, regardless of when it was purchased and by whom. It is not necessarily the case that the art purchased during the marriage will be physically shared item by item, to be displayed in either party’s home, but it is essential to capture its value in the calculation of the marital pot. The parties can agree whatever terms they feel achieve fairness, failing which the court has a wide discretion to divide the assets (or order their sale) to achieve overall fairness in the circumstances of the case. For items of particular sentimental value, it is common for parties to want to impose a condition that the receiving party leave by will to their children. The court does not have the power to order this as English law allows for testamentary freedom but, if the parties can agree, their settlement can provide, for example, that one party enter into an irrevocable deed to leave certain items to the parties’ children upon their death.

Protecting Artwork on Divorce

Ultimately, to protect any asset from sharing in the event of a divorce, it is prudent to enter into a pre/post-nuptial agreement setting out how their assets should be divided in the event of a divorce. Nuptial agreements are becoming increasingly popular with couples who wish to agree the division of their assets and avoid a potentially contentious divorce in the event of marital breakdown. Spouses should also ensure that the purchase and ownership of the art is clearly documented and consider where it should be stored or displayed. Disputes about gifts are also common in divorce cases – one spouse may argue that a piece was gifted to them individually, whilst the other claims that it was gifted to them both. Care should be taken to ensure that gifts are evidenced and insurance policies are in the right name. Open and honest  communication, whether in negotiations surrounding a nuptial agreement or otherwise, can help to avoid disputes on separation. Early professional advice is crucial in identifying and valuing artwork to achieve an overall fair settlement in divorce  proceedings.

Frederick Tatham, Partner, Farrer & Co

Elizabeth Biggs, Associate, Farrer & Co

Rachel Doerr, Founder & Managing Director, Doerr Dallas Valuations

Visit the Farrer & Co website here: www.farrer.co.uk

Visit the Doerr Dallas Valuations website here: www.doerrvaluations.co.uk

Silver's time to shine

Silver’s Time to Shine: How Rising Prices and Unique Pieces are Reviving the Market

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Over the last few years, the silver market has perhaps been viewed as a rather quiet part of the art market, reliable but somewhat disregarded.

You may remember Woody in one of the later Toy Story movies. Silver, like Woody, is proving that you should never write off something just because it isn’t quite as shiny and new as it used to be. It may well prove to be your best bet as a long-term friend.

It is undoubtedly true that some areas have been stagnant. Life-style changes make it unlikely that we are going to see a revival in the taking of tea from an early 20th century silver tea set, or the use of peppers and sugar casters. However, that only paints a partial picture because nothing is ever completely one-dimensional.

I kilo silver bar.

I kilo silver bar.

An article in The Antiques Trade Gazette neatly summarised the situation thus:-

‘The increase in bullion prices can influence antique silver prices in several ways. It can make owning silver appear more attractive as an investment, it can create a sense of urgency among collectors and enthusiasts as prices rise and lastly it can raise awareness of the craftsmanship, beauty, and historical significance of antique silver over other tangible assets.’

There has been much made of the increase in precious metal prices over the last few years. The price of these precious metals is usually tagged to global financial and political stability. The turbulence of recent years has seen a huge increase in the price of some metals, particularly gold. However, this should be counterposed against a reduction in the price of other precious metals notably platinum and palladium. This is largely due to the decline in use of these metals, along with rhodium. These are collectively known as the platinum group metals – PGMs. Car manufacturers have turned to battery powered electric vehicles which do not need PGMs in catalytic convertors causing a downturn in demand, and consequently the raw metal price. For many years platinum prices tracked or surpassed the price of 18 carat gold; at present both platinum and palladium are worth less per gram than 9 carat gold.

A 1962 silver owl mustard pot on sale for £2250.

How does this affect silver?

In September 2019 silver was trading at about £15 per ounce, and by August 2020 it was over £21.60, and as of today it is trading at £23.28. There is much speculation that the price of silver has a long way to rise. Unlike the PGM group metals silver is still widely used in industry, in medical technology, cameras and in the electronics sector in the manufacture of machinery requiring electrical contacts such circuit boards and semi-conductors. What, you may well ask, has this to do with the valuation of domestic silver?

As one silver dealer put it to me recently, much domestic silver is now scrapped to be used to make 1 kilogram bars of silver which are sold to ‘stackers’. These are people who believe that the price of silver will soar when the increasing global demand far outstrips the annual output. What is far more optimistic is a flourishing of rare, novel, ancient, esoteric and unusual pieces. This has seen some stunning prices at auction recently including a set of rare Scottish late 17th century provincial trefid spoons which sold for £13,000 , against an estimate of £3,000 – £5,000, and a stunning George III candelabra centrepiece which made £44,000 at Dawsons last month. This piece had been found in a suitcase under a bed where it had lived for the last 45 years. This is particularly relevant as the auction house revealed that the last insurance valuation has been conducted in 1987. Dawson’s research had partnered it with a similar pair of four branch candelabra sold by Sotheby’s in October 2022. This undoubtedly helped the piece achieve over twice the higher end of the estimate.

Thus, you have high prices because of the inherently high price of silver at the moment, offsetting the lack of interest in some areas of domestic silver; coupled with even higher prices for anything that is a little out of the ordinary or even very splendid as above.

In terms of making sure that insurance values are pegged to the current market, it is worth considering whether good pieces are adequately insured and whether more modest silver may be over-insured. Perhaps some pieces might be better sold if they are only gathering dust in drawers and cupboards rather than being used and enjoyed.

Whatever you decide to do with your silver it is always worth ensuring that you have the best up to date information to help you make informed choices that are right for you and your family.

An American novelty stamp box for sale at Peter Cameron for £425

An American novelty stamp box for sale at Peter Cameron for £425

Under Pressure – The Exponential Growth of Underinsurance

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The Exponential Growth of Underinsurance

As 2023 drew to a close, I look back on the year and reflect on the subjects I have found myself discussing most and even on the morning of the 27th of December at 9am I received a call from a long term client of ours whom is not only well respected, but incredibly astute, and this case highlights without a shred of doubt, the biggest problem in our collective industry currently.

A client of theirs is looking to insure a collection of jewellery with insurance values ranging from £1,000 – £20,000 – individually not huge sums, but collectively a significant amount. The figures have been gathered through somewhat standard avenues of what was paid for the item and “what we think it is worth/or worth to us”.

In my estimation, the collection is probably underinsured by a figure close to 50%, and on some individual items, close to 75%. We are now working out when we can get to the client as soon as possible in the New Year.

Whilst it may have been considered the ‘elephant in the room’ for many years, brokers and insurers are now discussing the problems that underinsurance can cause. We all know that the implications of underinsurance can be catastrophic, but how do we pass that knowledge on to clients and give them the knowledge that they need to make an informed decision about their cover, and having a professional valuation?

A recent example occurred during the summer, of which I was part of the team assessing a large estate that had been inherited from parents of a well known farming family. The figures provided were done so in the mid 1990s, and index linked from that date, with a figure of around £250,000 for the entire contents of the property.

Following the valuation, the figures were certainly surprising to the client, and the broker.

  • A general contents figure of £200,000
  • An antiques and collectibles figure of £210,000
  • A silver figure of £101,000
  • An art figure of £210,000

What astounded me is that despite being a heritage property, the insured still had all the contents in one general contents pot, with no specific categories indicated on their policy. Following the valuation, the client and broker now have a far better image of what they are insuring with correct figures for different areas, representing far better value for the client and a far better risk evaluation for the broker and insurer.

A recent survey completed by one of the biggest insurers of high net worth clients in the United Kingdom has revealed that 67% of their clients need more guidance and assistance with their collections. This offers great potential for brokers to have the conversation with their clients about how they can help and offer an ever greater service.

What is clear is that the market is changing, with people’s tastes moving from more traditional avenues of collections and investment. The same survey indicated that 44% of high net worth clients invested in jewellery, and the same percentage in watches, which have both seen exponential growth in the last decade.

The great opportunity that a valuation always offers for the client is not only knowing the value of specific items within their collections, but also the figures of the collection total in addition to the individual items mentioned previously, so one can gather a ‘snapshot’ of the property.

So, should the subject of under insurance still be swept under the rug? Well, if its increased in value by 60% in the last five years, probably not.

Investment Handbags

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The handbag industry has grown by over 65% in the last few years and is showing no signs of slowing down. Demand for handbags on the resale market has never been higher, and this once small industry is booming. In fact, investing in a handbag is a smart way to spend your money.

The industry

Luxury is synonymous with quality and quality promises longevity. Many of the popular handbag brands such as Hermès, are hand stitched by specially trained artisans, and made from the world’s most luxurious and fine materials. They are built to last and that’s part of the reason they remain staples forever. The same can be said for many of the other luxury brands such as Chanel and Louis Vuitton.

Over the last few years there has been a substantial rise in demand for preowned designer handbags, with brands such as Hermès, Chanel and Louis Vuitton making excellent prices on the resale market. Consumers are willing to pay a premium for a second-hand handbag, and this is one of the reasons why they are becoming such a great investment. In fact, some brands can achieve more at auction than what they are currently retailing for, and those retail prices are increasing year-on-year.

See below Hermès Birkin selling at auction for £15,300.

Why the rise in popularity?

The main reason this industry has soared is because the consumer has gained trust and confidence in buying preloved designer handbags. There are simply more experts and places to buy than ever before. If we look back 10 years, a Hermès handbag going through auction, would have been a single lot at the end of a jewellery sale, it was unusual to see a handbag at auction and they certainly did not warrant their own specialist sale. Now, most auction houses hold their own designer sales with teams of experts in the field.

See below increase in a Kelly handbag in 2007 selling for £400 and in 2023 selling for £7,650.

See below Louis Vuitton and Chanel classic from a sale in Christies 2006 as a group lot and selling for only £480. Now you could expect the LV to make that on its own.

As well as auction there has also been in an increase in online shops and boutiques. There are also handbag spas who specialise in the restoration of luxury handbags, so even one in used condition can be brought back to life.

The preloved industry has seen an increase in popularity over the last few years. One of the reasons for this increase is a desire for people to reduce their carbon footprint, as well as having a more active role in the circular economy. Buying second hand increases the life of a handbag and this keeps fashion out of landfills.

There is also so much more choice for the consumer on the resale market. This is because every season, fashion houses unveil new collections, and stop producing the older models. Anytime you shop directly from a brand, there are a finite number of pieces available for purchase. When buying resale, the consumer can choose from a wide selection of designs and vintage styles. This means access to limited-edition runs, discontinued colours and rare pieces that are no longer available from the labels themselves.

Hermès

As one of the most desired handbag brands in the world, the Hermès Kelly and Birkin make a great investment and are highly collectable. Due to the slow and precise crafting of the bags along with materials and leathers that are difficult to source, only a handful of bags are made by Hermès each year. This limits the ability to purchase new bags directly, hence the extremely lengthy waiting list, if you can even get on one to begin with. These are all factors that make the resale market such a popular place to purchase a Hermès bag; you get an amazing amount of choice and no waiting, and consumers are willing to pay a premium for this.

Look below at the examples of the same bag sold in 2005 £5,760 and 2022 for £11,000.

Kelly and Birkin handbag

Hermès, like many other brands, increase their retail prices at least once a year and when we look at this over their lifespan, we can start to see why they make such good investments. In the 1950’s a standard Kelly bag could have been purchased for $900, by the 60’s the same bag cost $1,300, the 70’s $2,400, the 80’s $4,000, the 90’s $5,100 and at the turn of the century it cost $7,400. Today, that exact bag has increased in value to $10,000 – $15,000. The same increase is seen with Birkin bags with a standard Birkin setting customers back $2,000 in 1980, $2,750 in 1990, $4,000 at the turn of the century, and today they sell for up to $20,000!

On the open market The Kelly and Birkin handbags will often sell for more than their recommended retail price (RRP) and as RRP’s increase, so will the resale price.

Below is a table showing the increases in the Kelly bag.

Below is the table showing the increase in a Birkin bag.

Special Order

Hermès produce a few custom designs each year, also known as Special Order or HSS and are identified by their Horseshoe Stamp. They are only offered to a select number of collectors, and the waiting time can be years before you are invited to purchase one, that is if you are lucky enough to get on the list. They are typically, in the Birkin, Kelly or Constance style and are one off mixes of fabrics, colours, and often bi-colour or tricolour with special hardware. These exclusive designs make a fantastic investment and are very popular on the second-hand market due to their uniqueness.

See below example of a special order.

Exotic skins

Hermès bags made from exotic skins are often in demand the most, with these typically increasing in value at a faster rate than standard skins. Exotic skins include lizard, ostrich, crocodile and alligator.

One of the most exclusive and expensive handbags in the world is the 30cm Himalaya Birkin, made from niloticus crocodile hide and has a subtle gradation in colour from white to grey, said to resemble the snow-capped Himalayas. Seen in the Birkin and Kelly style, the hardware is white gold and pave set with diamonds. These bags are the epitome of luxury and in 2021, one achieved over £400,000 at auction.

A very important thing to remember when purchasing a Hermès exotic skin handbag is to always buy one with its original CITES (Convention on International Trade in Endangered Species) certificate, this is the passport for the skin.

Colours

Hermès are known for their vibrant and unique colour combinations, however they also have an expert eye for neutral colours and offer a wide spectrum of neutral shades. These are very popular when it comes to the secondary market because they are so versatile when worn and remain timeless, however they also offer some fabulous brightly coloured versions, which are also very popular.

See below price example of Hermès handbag at auction.

Chanel

The demand for Chanel handbags and the lack of supply in most boutiques has led to the resale market rising at the same rate as retail prices.

Chanel increased their prices again in March this year (2023) with the ever-popular Chanel Classic Flap Bag increasing by 16%, making its new retail price more than £8,500, up from £7,250 earlier this year. Some other models increased by 14% and increases are expected to continue throughout the year.

The price of a Chanel handbag has steadily gained momentum since 2008 with prices accelerating faster over the last 5 years. Global demand for Chanel is high and despite their steady increase in prices, demand hasn’t fallen as evidenced by the strong resale market.

Let’s look back, in 1955 the Chanel 2.55 first sold for around £150 and currently retails for £8,530.

See below example of the 2.55.

The Chanel Classic Flap was first released in 1983 and sold for about £600 and now retails for £8,500.

A medium Chanel Boy Bag has increased from £3,600 in 2018 to £5,580 today and similarly the Wallet on Chain from £1,600 in 2018 to £3,210 today (2023).

See below example of the Chanel Boy Bag.

Chanel retail locations are still supply constrained and the classic bags are regularly sold out, this only fuels the demand on the resale market.

Resale prices for Chanel are also at record levels and pristine bags are in high demand. Collectors are looking for rare bags from previous seasons and sold-out new styles like the 2022 CC “In Love” Chanel Heart Bag.

Below is an example of a Chanel Classic exceeding its sale estimate.

Here is an example of a Chanel handbag selling at auction in 2003 for only $200.

Louis Vuitton

Louis Vuitton also can make a great investment!

Their classic designs are timeless, for example the Louis Vuitton Speedy, first released in the 1930’s, is a great handbag that can be purchased for under £1,000 on the resale market.

Other classic models that are very popular include the Alma, Keepall and Pochette.

See below examples of an LV going through auction.

See below Limited-Edition Louis Vuitton Speedy selling for $2,500 at auction.

See below Limited-Edition selling at auction.

The very best investment pieces by LV are the Limited-Edition versions.

While Marc Jacobs was creative director for LV he partnered with Stephen Sprouse, Takashi Murakami and Yoyoi Kusama to create Limited-Edition bags that remain highly sought-after in the secondary market (see three examples below).

Conclusion

With styles of Hermès making six figure sums, and auctions selling handbags totalling over £1.34 million in a single sale, now is a great time to review your handbag’s value, you’ll be pleasantly surprised.

General contents the invisible problem?

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Every week we see record prices being achieved by some of the greatest artworks known to man, with some of the most glamorous jewellery and watches going to auction at incredible sums, but how often do you talk with your clients about the carpet in the drawing room, or the suite of furniture purchased in the 1990s?

Just this week we have heard more news about inflation and cost of living rising again, and potentially this could increase well into 2023 and beyond.

So how does this effect your mid – high net worth clients and their contents?

The value of items within the ‘General Contents’ section of most customers insurance schedule has been rising for many years, even before COVID–19 and the dreaded lockdowns of 2020.

According to the Office for National Statistics, the values that we are seeing are increasing year on year for general home furniture by around 16% per year so a settee purchased for £10,000 this time last year would now be costing £11,600, with garden furniture increasing by up to 25% per year. So why is this?

The cost of manufacturing has sky-rocketed since 2019, with many companies having issues recruiting staff and/or sourcing materials, in turn the supply chain has suffered with transport issues in abundance – it’s not unusual to see waiting times run in to months for some items.

Two of the items that I am constantly surprised by are curtains and carpets, with some of our clients spending six figure sums on carpeting their homes, and a pair of lavishly lined silk curtains for a 13ft high sash window costing nearly £10,000, however on paper these have only increased by around 5% this year – but, this is only for the material and not the fitters or the makers, so in turn I believe that these figures are increasing by around 24% with that same pair of curtains now costing £12,400.

Whilst statistics are not available for the inflation of electrical goods, this market is different as the advancement in technology means that many items are out of date the minute they are released, there has of course though been a general increase across the board in most items of this nature.

Clothing will continue to be an interesting question with a broad figure of 8.5% inflation across the board, this however will absorb the designer and couture elements alongside the high street fashion world, which does not always give a totally accurate reflection of the mid-high net worth spending habits.

Whilst each manufacturer is different and sometimes these inflation costs will be absorbed into the operating profit of the company, in most instances, and especially in High Net Worth accounts, it is passed on to the client.

When taking an overall look at your clients, by all means be sure to look at the fine art, the jewellery and many other of the ‘visible’ items that clearly will have changed in value, but be sure that you don’t ignore the invisible ones that may well mean your client is underinsured.

Walk-through Valuation – SPECIAL OFFER

The Walk Through Valuation is a beneficial offering for you or your clients if current content values are based on a ‘guestimate’ or a ‘rough idea’ to ensure the values provided are accurate and up to date. For the comfort and security and assurance that in the event of any claim you are covered why wouldn’t you?

You don’t want to find a claim is not paid in the event of a loss, so ensuring your insurer has a true reflection of your values is so important. The Walk Through Valuation is designed for the Mid Net Worth client to establish/categories the contents correctly, on a room by room, category by category basis, itemising items of single value, identifying issues and providing cross room photographs. We don’t value the jewellery but we will discuss/establish if the current cover is adequate and any other areas of concern which would require a specialist visit.

A Senior valuer will attend the property to complete and the survey takes approximately 3 hours to complete. Our report will be issued within 15-20 working days providing recommended figures and illustrated.

So, to ensure you/your clients values are true and accurate, recommend the need for a Walk Through Appraisal today – up to 4 bedrooms – £540 plus VAT@ 20% including travel.

Call us today on 01883 722736 to book an appointment or email [email protected]

8 Problems with asset valuations clients may not recognise – what brokers need to know

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When a client tells you they have a valuation for their assets a broker may breathe a sigh of relief – but that relief could be misplaced.

Alastair will share examples of documents Doerr Dallas Valuations have seen from clients and brokers that are inadequate and explain why this is the case. He will also share ideas and questions that may be useful for brokers to help them raise these issues with their clients in a non-confrontational way.

Making sure your client has correctly valued all their assets will:

  • Ensure you are offering the best service
  • Reduce the chance of issues at the point of claim
  • Ensure the risk is correctly underwritten, insured and priced
  • Potentially lead to higher (but correct) premiums, and hence higher commission
  • Protect your PI from claims that you did not correctly advise your client

There will be the opportunity for Q&A at the end of the session.

Audience: useful for all levels of experience, and for both personal lines and commercial client-facing broking staff. Particularly useful for those early in their careers.

The importance of professional valuations for HNW clients

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Up to date valuations of assets are becoming ever more important – and the quality of that valuation can be critical. The last time anyone wants to discover it is missing or out-of-date is when a claim comes in and there are coverage issues.

Valuations are key for policyholders to:

  • Prove ownership
  • Describe the item, with a photograph
  • Give a current true replacement value for insurance purposes

Professional and up-to-date valuations are also key for brokers, AR’s and insurers because:

  • They help an underwriter correctly assess and price the risk – reducing the risk of underinsurance
  • They make policy negotiation conversations easier – e.g. clarity over what is owned, how much is actually worn vs. kept in a safe

  • Jewellery setting checks reduce the risk of loss/damage, and therefore claims
  • Should an item be lost/damaged, it is easier and quicker to assess the loss and handle the claim with a detailed description and accurate valuation (reducing claim management costs for all)
  • Better claims management = happier policyholder = higher retention (where you want to keep the client!)
  • Indicative of a “good insured” – they have invested in, and take care of, their property.

So what’s the problem with “valuations” in the industry at present?

There are many issues that can arise:

  • No valuation at all.
    This could be because the item was a gift or has been recently inherited, or because the receipt or valuation has been lost/mislaid.Surprisingly, on visits to clients’ homes by valuers, high-value assets that are not specified (and therefore not covered) are often identified – simply due to oversight by the client. This could be a painting, a Hermes handbag collection, or jewellery the client has forgotten about. Many policyholders do not realise that a piece of furniture, a tapestry, or some books or antique ceramics are actually very valuable (hence the popularity of “Antiques Roadshow”!)Brokers are sometimes unable to visit clients’ homes due to time-pressure – which means this is a real but unrecognised risk. A home visit by a valuer can mitigate this.
  • An out-of-date valuation.
    Prices for HNW assets can fluctuate dramatically, but at different levels over different time periods (see below). An out-of-date valuation will mean the item is underinsured, leading to underpayment at the point of claim.
  • A simple purchase receipt.
    This may state that £10k was paid for a diamond ring, but does not give enough information to replace it easily. It can also lead to underinsurance – as some collectible items can increase in value immediately after purchase.
  • Unreliable valuations and receipts.
    At the point of claim, an insurer may accept a receipt from Goldsmiths or Sotheby in the UK as evidence of an item having been purchased and owned. They are reputable companies, and the receipt will be in £’s sterling.What if there is an issue or error with a valuation? Does the company providing it carry PI in the UK? Do they have the expertise to correctly value an item? Do they follow industry best-practice standards e.g. FSQS? Are they GIA registered?A receipt or valuation may be from a company in Russia, or India, or Hong Kong. It may be written in that language, with no easy way of knowing whether the company is reliable and trustworthy. Is this a genuine purchase receipt, or could it be a fraudulent, inflated valuation? Even if genuine, it is still an issue for claims teams at the point of claim.What currency is the valuation in? Sterling, US dollars and Euros are currencies which can be reasonably relied upon. But how comfortable is a claims team with a valuation in Russian Rubles or Venezuelan Bolivars, currencies that can fluctuate wildly. What about a valuation in Bitcoin? What value should go in the policy – who decides?

Poor valuations typically lead to underinsurance, difficult claims handling for everyone (client, broker/AR and insurer), and even claims being rejected.

This underinsurance also means GWP can be left on the table for the insurer, and less commission is earned by the broker or AR.

What should a valuation contain?

A professional valuation will provide a comprehensive document that includes:

  • An overall description of the item, including dimensions and overall condition
  • For jewellery:
    • details of the stone(s), including size and quality. If a stone is certified, the report number and date should be noted within the description, as well as the name of the grading laboratory.
    • the metal and overall setting
    • any marks (such as hallmarks or maker’s marks)
    • a value, which should be dated and confirm the purpose/type of valuation
    • confirmation that the clasps and settings of jewellery have been checked. This will help if a “clasps and settings” clause has been applied. It will also reduce the risk of loss or damage overall.

What’s happening in the HNW asset market at the moment?

Values change all the time. The replacement value for something bought 10 years ago will be different to the purchase price (if known). There is a common misconception that antiques have no value – it may be difficult to sell them, but can prove very costly to replace them if damaged or lost.

The costs of restoration and repair have increased exponentially. If an item of furniture or jewellery has been damaged, it can possibly be repaired – but this is likely to be at a substantial premium. It’s not just the time and skill of the artisan you are paying for, their rates, rents, stock and materials have all increased significantly.

Ceramics and glass from the early 20th Century are often overlooked by clients. These items are achieving record-breaking prices at auction – the owner may well not know this, but this can be spotted and a problem avoided during a home visit.

Paintings and artworks often represent some of the highest valued items in a home, yet little regard is paid to ensuring their insurance cover is up-to-date and adequate. The value of art can change/fluctuate significantly, and sometimes overnight (e.g. death of an artist). The value is often linked to taste and fashion – which artists are most desirable at the time. John Constable’s iconic “Hay Wain” was the Nation’s favourite artwork for generations; it has now been displaced by Banksy’s “Girl With Balloon”. How is a broker/AR to know during a client home visit whether the artwork on the wall is likely to be valuable and needs a proper valuation?

What’s the solution?

Clients should be encouraged to get a professional valuation of all their HNW assets done on a 3 yearly basis. If the client is a collector of watches, they should consider reviewing values annually – makers discontinue styles over time, thereby increasing their values.

For many clients, a home-visit is the quickest, easiest, and safest way to achieve this – as the valuer(s) will come to their home at a time of their choice. This helps ensure no potential HNW asset is left unidentified and unspecified.

Ideally, a valuer should be able to value all items (e.g. paintings, jewellery, watches, guns, clothing/shoes/handbag collections), not just some of them. A one-stop-shop service – with the right expert for each area.

A good valuation service will be FSQS registered – meaning they adhere to finance industry-recognised standards. This provides confidence in the quality of the valuation and the safety of customer data. They should also carry UK-based PI in case of a mistake or error.

Brokers and AR’s are critical in the valuation process. The client may need convincing to invest in a professional valuation – they are often not as expensive as many think.

A good valuation service will be happy to do an initial phone call with the broker/AR in attendance to explain the process, why this is so important, and the risks of not being correctly valued. Having the broker/AR at the site visit is also very useful, as it helps cement their relationship with their client, and helps them more fully understand the needs of their client.

Who are Doerr Dallas Valuations?

This article was written by Rachel Doerr of DDV.

Rachel has spent her career specialising in valuing HNW assets, setting up her own business to do so in 2016. The business is FSQS registered, and carries PI of £5m.

Doerr Dallas pride themselves on their relationships with brokers and ARs, and are keen to support them in many ways free-of-charge, for instance:

  • Quotations, often including different cost options to meet the needs of different clients
  • Training for staff
  • Articles for websites and newsletters
  • Presenters at events e.g. speakers, free valuations at a wine-tasting
  • Joint phone calls to clients
  • Reminders when the market has changed and certain items need revaluing

Doerr Dallas Valuations can help eliminate concerns about the correct valuations of a client’s HNW assets in all categories, for clients in the UK and across Europe. The team includes some of the most renowned and internationally recognised specialists in their areas of expertise – including Fine Art, Antiques, Silver, Jewellery, Watches, Classic Cars, Books and Manuscripts, and other valuable collectibles as well as handbags, wardrobe contents and general household contents.

Rachel can be reached on 01883 722736 or 07876653602 and email [email protected]