View this article online: https://www.claimsjournal.com/news/national/2020/10/13/299899.htm
Iranian (Persian) rugs and carpets are one type of very sought-after, artisan-made rug for those who admire beautiful, long-lasting, potentially appreciable, hand-knotted rugs. Some enthusiast compare a fine Persian rug to a Picasso or a Van Gogh.
Due to years of conflict between the United States and Iran, a bit of background on obtaining Iranian rugs, and imported products from Iran in general, is useful to know. Since the Islamic Revolution in 1979, varying sanctions on anything made in Iran have been the rule of law in the United States. For a period following the hostage release in 1981, after sanctions were briefly lifted, Persian rugs flowed into the US again. Throughout the 80s, 90s and early 2000s, the US banned Iranian oil imports and trade with Iran. In 2010 these sanctions were expanded to ban imports of Persian pistachios, caviar and rugs, and shop owners were once again prohibited from importing their wares. Five years later, when the Iran nuclear deal passed, the Persian carpet business boomed once again. Realistically, embargos have never been in effect long enough to affect rug prices. The majority of antique Persian rugs have been in the hands of western collectors and dealers for the past century. (Very few antique Persian carpets are actually imported from Iran).
There’s a healthy selection of Persian rugs available in the current marketplace. When the embargo was lifted most recently in early 2016, US carpet dealers made up for lost time, purchasing millions of dollars’ worth of rugs to sell in the US and replenishing their inventories for future sales. For now, one should be leery of a rug dealer who cites increased prices due to embargos. Many insureds present this as justification of higher claimed values (much above an original cost), when a local vendor has told them that the replacement value for their rug is much higher due to embargos. This is just not the case and prices may not rise for quite a while, (closer to at least five years from now if current policies hold).
Before the sanctions, Iran (formerly Persia) was the premier hand-knotted rug exporter to the US. India, Pakistan, China, and other countries with weaving traditions, have slowly moved into that spot after sanctions curbed exports. The quality of modern rugs from these other countries has become increasingly exceptional as a result. These countries all weave rugs and carpets in designs derived from their own weaving traditions, but they also produce many “reproduction” rugs with traditional Persian designs, named after the regions they are from, for example, Indo-Tabriz and Sino-Qum rugs are abundant in the market, which is why it’s important to confirm the country of origin when evaluating a hand-knotted rug as pricing will vary depending on this along with other factors. Country of origin is a primary value driving attribute and can be confirmed through an inspection or specific photos taken of the fringes and finished edges of a rug.
The Situation
Our contents specialists received an assignment for a 10-foot-by-13-foot carpet, described as a “handmade antique carpet,” with an insured’s stated value of approximately $75,000. This value was arrived at based on the insured’s search on-line for rugs that were similar in design to their rug.
One can see how researching a rug based on the design only can be problematic as we’ve highlighted that a rug with a Persian design can easily have come from multiple different countries, or may not even be hand-knotted. Additionally, an on-line search using the words “antique” and “Persian rug” will yield results showing values between hundreds of dollars to hundreds of thousands of dollars. The term “antique” is also often used very loosely, without an understanding that an item is only a true antique if it is 100 years or older. There is a particular “patina” that older rugs acquire over time and there are also certain types of rugs that are known to easily sun-fade over time due to different types of dyes and different qualities of wool. There are also rug colors that are clearly the result of newer aniline (synthetic) dyes that were introduced in the late 19th, early 20th century. Furthermore, as a result of design trends, there are finishes given to many modern rugs which will essentially “fade” a newer rug to give this the look of an older antique piece and often these have the word “antique” in the description, though this obviously has nothing to do with actual age.
Documentation is crucial in scenarios like this, but as often the case, this rug was no longer available and a set of comprehensive images could not be obtained in order to establish important value driving attributes for this item: country of origin, actual age, knots per square inch (kpsi), etc. However, rugs have a big benefit – many family photos of pets, infants and children frequently show the rug on which they are sitting or playing. The rug in this claim was inherited and the insured did not know the details of its acquisition or the original cost. The only supplemental information provided was that the carpet was believed to have been purchased at auction in the late 1990s. The team was also provided with a few pre-loss event photos, including one of the family cat sitting atop the rug in question.
As we’ve established, determining age is one of the first steps in the valuation process. In this case, the actual age of the claimed item was not known to the insured and for reasons stated, we questioned whether this was a true antique. There are attributes that older vintage, semi-antique and antique rugs will have, such as the design and coloration. Certain vegetable dyes used to create the palettes of older rugs are often distinct. Knowledge of how these dyes age is also a tool in establishing the age of a rug. Wear and tear is usually visible in most older rugs unless they have never been used or have been hung on a wall.
Fringes are a good indication of age as well as country of origin, as different countries finish rugs with different fringe designs and as these are often the areas of a rug that become worn more quickly than other parts. An antique rug’s fringe will naturally have coloration that any item over 100 years old will obtain. The image provided of the rug in question, showed a fairly bright, white fringe and the fringe was also knotted in a particular style common to rugs woven in India. While the rug had a traditional Persian design, this appeared to be a contemporary (woven in the last 50 years), reproduction rug, based on the coloration and fringe style.
We identified the claimed item as an Indo-Bidjar carpet, (hand-woven in India in a Persian Bidjar design), contemporary in age, measuring 10′ x 13′ (130 square feet). Our survey of rugs and carpets with similar attributes, available in the current retail market from reputable vendors who specialize in like kind and quality (LKQ) items, found comparable Indo-Bidjar carpets, in varying size format, retailing for amounts reflecting a square foot cost of approximately $30 per square foot. Applying an expected square foot cost for this type of rug to the overall dimensions of the claimed item, resulted in a total of approximately $4,000 as a reasonable retail replacement value for this item in the 2019 market.