The Value in Stolen Art

A homeowner returns after an evening out and finds that her home was robbed. Among the many items missing is an expensive piece of art passed down for several generations in her family. After filing a police report and a claim with her insurance company, the insurance company contacts an appraiser to help them determine the value of the painting at the time of the loss so that their insured can be paid. In my career as a fine art appraiser at Enservio Select, I am often presented with these circumstances. Arriving at a value is just one part of the service we provide. I will also complete a brief search to make sure the work was not previously stolen. The implications of previously stolen work are far reaching and, if not discovered, can financially affect both the insured and the insurance company.


For the sake of argument, let’s say that a few years after the insured’s piece was stolen it was recovered and that in that time, the value for the work went up significantly. It is understandable in this circumstance that the insured would want her artwork back but most of the time the insurance company will argue that the insured was paid at the time of the claim and that the insurance company now has the right to the painting.

In “Spencer’s Art Law Journal” attorney Ronald D. Spencer says,“Any specific dispute between insured and insurer would involve a close examination of the actual insurance agreement in question, as well as an analysis of the applicable state law. But generally, in the case of recovered art, the insurer would argue that the insured was ‘made whole’ at the time of the theft when the insurance proceeds were paid, and that the insured agreed to release interest in the piece and allow the insurer to step into its shoes once it received those proceeds. The insured, in turn, would argue that the insurance proceeds did not fully compensate for the loss of the painting either then or now, and, in fact, no amount of money could ever replace the unique painting. The insured therefore seeks the painting itself as the only way to be ‘made whole,’ and will happily pay back the insurance company the proceeds received years ago to the extent the insured is double recovering.”

Previously Stolen Art Work

This becomes a moot point, however, if it is discovered after the fact that the original work was never owned by the insured at all. In that case, neither the insured nor the insurance company would have legal claim to the work of art. There is no better example of this than estimated 5 million works of art looted by the Nazis. Today, the search for Nazi stolen art continues with the help of museums, law enforcement, and websites such as the Art Loss Register which allows users to search a database of all reported stolen art and objects. While there are no federal bureaus or departments which regulate the sale of art, the Uniform Commercial code is enacted in various states and it says that an art work must have clear title, the item must be what it is purported to be, and the person selling the artwork has to have a legal right to transfer the title. Theft nullifies title and often the original owner, or in the case of Nazi-era art, the family of the original owner, may claim the pieces that were stolen from them. Believe it or not although only 5% of Nazi era art has been recovered, obtaining previously stolen artwork is not an uncommon situation. In May of this year, a collector who purchased an Old Master painting from Sotheby’s in 2004 now says it’s worthless because he discovered that it was once owned by the war criminal Hermann Goering and may have been looted by the Nazis. This puts a cloud over the title and makes it difficult to both sell or insure. A more famous story is that of Paul Rosenberg, a leading dealer in his day of Modern Art. Hundreds of his pieces were looted by the Nazis during the war and since that time, three generations of his family have been hunting them down by scouring auction catalogues, working with Interpol, and taking museums to court.

In high value art claims, appraisals, or in consultation on purchases, art appraisers at Enservio Select can aid the insurance company or an art owner by completing due diligence. Steps taken to ensure the work has not been previously stolen might include searching the Art Loss Register and the FBI’s National Stolen Art File, checking government websites if the art originated in another country, speaking with dealers, and consulting the catalogue raisonne of an artist’s work.