Underinsurance is a common issue in the insurance industry (ABI 2017). And it’s easy to underestimate the total value of your home’s contents. Many homeowners may not realise the effect underinsurance can have emotionally and financially. The emotional impact of losing your home is difficult enough without the burden of financial loss.
In order to make sure you are suitably protected, we’ve identified two ways you could be underinsured.
1. Sums insured
Sums insured is split into buildings and contents.
Buildings
Includes the home and fixtures & fittings such as TV aerials, garden walls, drives, fixed hot tubs and any outbuildings but not garden items.
The sum insured for buildings needs to represent the reinstatement or rebuild cost, not the market value of your premises. This sum will need to include:
- Materials used
- Labour costs
- Architect’s fees
- Surveyor’s and legal fees
- Cost of demolition & debris removal
- VAT
- Any public authority or planning costs & inflation
Contents
Contents are classed as anything that would fall out if you were to shake your home upside down.
A handy way to help you to estimate the value of your possessions within your property is by using our contents calculator.
2. Specified items
These are classed as high risk property which includes any jewellery, watches, furs and precious metals. We treat pairs or sets of items as one item. Precious metals means any metal that has a high economic value due to its rarity such as gold, silver, platinum. You should also have up to date valuations on specified items which must be revalued every three years.
On our most popular policy, items must be specified if over £5000. Antiques or works of art over £15,000 would also need to be specified.
If you’re concerned about underinsurance, get in touch with us on 01823 250708 and our team will be happy to help.
Calls may be recorded for use in quality management, training and support.
