AMONG WORLD’S MASTERPIECES, IT’S INSURANCE THAT’S PRICELESS

The destruction of an uninsured 18th-Century portrait at the Huntington Art Gallery in San Marino last week has revealed a little known peculiarity of the art world: Few of the world’s priceless museum pieces may be insured against total loss.

Art and insurance experts said in a series of interviews that museums rarely insure their permanent collections of irreplaceable masterpieces at anywhere near their actual dollar values. According to one leading fine-art insurer, a museum collection often may be insured for no more than a tenth of its value.

Given the unique nature of masterpieces, the experts said, museum money that otherwise might go toward insurance premiums is usually best spent on efforts to prevent the destruction of priceless artworks--fire and theft prevention systems, for example.

“There are things in this world that are definitely uninsurable,” said Patricia A. Borowski, vice president of the National Assn. of Professional Insurance Agents. “When you’re talking about that, your money is probably best spent on prevention.”

“I couldn’t agree with her more,” said Huntington T. Block, a Washington-based insurer who is one of the nation’s leading brokers of fine-art insurance. “You put your money first in safety and then in insurance.

“I think today that most museums of any size or distinction carry insurance, but most museums don’t insure their entire collections.”

Smoldering flames in an elevator shaft at the Huntington suddenly burst through hallway doors into the main gallery area early Thursday, scorching furniture and destroying Sir Joshua Reynolds’ portrait of Mrs. Edwin Lascelles. Believed painted about 1777, the English art work was purchased in 1913 by railroad magnate Henry E. Huntington.

Firefighters were on the scene reportedly within 10 minutes of the Huntington’s fire alarm. Cause of the fire was attributed to an overheated elevator door motor, according to a museum spokeswoman.

The Huntington has sophisticated smoke-, heat- and theft-detection equipment but no sprinkler system, which is not favored by many leading museums because of the potential for water damage.

The museum’s two most famous paintings, Gainsborough’s “The Blue Boy” and Lawrence’s “Pinkie,” were at the “extreme opposite end of the building” from the elevator shaft, said spokeswoman Katherine Wilson.

Like the destroyed Reynolds, however, the two masterpieces are uninsured. “ ‘Pinkie’ and ‘The Blue Boy’ are priceless paintings,” Wilson said. “There’d be no way for us to insure them.”

The value of the lost Reynolds painting was estimated by one expert at “several hundreds of thousands of dollars.”

Gallery Director Robert Middlekauff said that “the cost of insurance premiums for such artworks is prohibitive.”

The Huntington does appear to be unusual in that such a relatively small loss, apparently less than $1 million, was not covered. Fifty million dollars worth of insurance coverage would cost about $200,000 a year, Block estimated.

But the cost of most commercial insurance has risen recently, Borowski of the insurance agents association said. She said that the Huntington’s fire-detection system probably did more to assure the safety of the gallery’s art collection than would have an expensive insurance policy covering the replacement cost of the irreplaceable artworks.

The Mona Lisa, she noted for example, has no insurable value because “you can’t replace it.” Assuming limited financial resources, there would be little incentive, Borowski said, for the Louvre to insure the Leonardo da Vinci masterpiece against destruction when the museum could spend its money on fire protection, theft prevention equipment or art restoration.

Works of art, however, are frequently well insured against damage, especially when they are on loan to other institutions.

Smaller museums can get group-rate insurance at a relatively modest cost, said Maureen Keefe, assistant director of the Art Museum Assn. of America in San Francisco. She said that 250 museums, including the La Jolla and Laguna Beach art museums, insure their collections through the association’s group plan.

Larger museums tend to deal directly with insurers, however, and their collections rarely are insured at full value.

The County Museum of Art has insurance covering about one-fourth of its collection, museum spokeswoman Pam Leavitt said. “Obviously, the entire value isn’t covered,” she said. “But no 747s are going to come crashing in, we hope.”

The world’s wealthiest art museum, the Getty Museum in Malibu, refused to discuss its art insurance situation. “We do have fine-arts insurance,” spokeswoman Jean Keefe said, “but it’s something we wouldn’t want to get into or discuss.”

“In theory, if you’re going to insure, you want to insure against your maximum probable loss,” said Phillip Babcock, director of the Smithsonian Institution’s office of risk management. “If you slide into the Pacific Ocean, you don’t insure against that.”

Like others interviewed, Babcock noted that security precautions are usually the best form of fulfilling any museum’s primary mandate to “protect and preserve” art and artifacts.

“That doesn’t mean that as a first line of defense that you go out and buy insurance,” Babcock said.

The famous Hope Diamond in the Smithsonian, for example, is not insured against theft, Babcock said. The diamond, which is displayed in a small but secure vault is protected to the point that insurance isn’t necessary, he suggested, and the actual worth of the museum piece is far greater than any monetary figure attached to it.

“The (insurance) money itself has no value,” Babcock said. “You can’t display money.”