High Value Home Insurance

Your questions – answered:

Do you need a valuation for house insurance?

• Valuations for house insurance are typically only compulsory for items for which the replacement value exceeds the ‘single item limit’ on your policy; this is the limit the insurer sets for ‘Valuables’ or ‘High Risk’ items such as jewellery, watches or artwork, above which the item must be specifically listed on the policy. The ‘single item limit’ will vary from policy to policy, so be sure to check yours. It is important to note that you are still responsible for ensuring that ‘unspecified’ pieces are adequately insured and you will have to provide evidence of ownership in the event of a claim, so valuations are still advisable for items of lesser, but still notable value.
• Valuations of your home’s rebuild cost can also be advisable, particularly if you are on a ‘blanket’ policy with a set ‘upper limit’ for the sum insured and you are concerned you might be getting close to this. Or if you are on a policy that insures for a specific value which is then index linked to each renewal and you haven’t had an assessment for a number of years.

Can House insurance be refused?

• Yes, an insurer can refuse to offer you House insurance. Every company will have a set of criteria that dictates what they will and won’t take on. If you don’t meet their criteria, they will not offer you cover, and they are not obliged to do so.

What is classed as a specialist?

• A ‘specialist’ is “a person who concentrates primarily on a particular subject or activity; a person highly skilled in a specific and restricted field”. In the context of insurance, this will be an individual or company who is highly qualified to provide advice on a particular product or ‘risk’. At Lloyd & Whyte Private Client we are specialists in insurance with a particular focus on high value home, high value contents and high value car insurance.

Why would you be referred to a specialist?

• You will normally be referred to a specialist ‘high value home’ or ‘high value contents’ adviser when your requirements aren’t suited to a ‘traditional’ insurance product. You may have a house that would cost a lot to rebuild (i.e. over £1million), perhaps you have a lot of high value jewellery or artwork, or maybe you just have a lot of high quality possessions and furnishings that would cost a great deal to replace.

Is specialist better than professional?

• Specialists tend to be professionals and professionals are often specialists – one is not mutually exclusive to the other

What is classed as a ‘high risk’ item for contents insurance?

• A “high risk item for contents insurance” can be one of many things and ultimately depends on the product you are looking at. For the traditional home insurance market, you will find this often includes quite a wide variety of items – jewellery, watches, artwork, cameras, items made of or that contain a precious metal (e.g. cutlery); they may even include electronics such as mobile phones, tablets and computers. A specialist ‘high value’ home insurer however, will normally only consider jewellery and watches as being ‘high risk’ with items such as artwork actually considered to be one of the lowest risks.

What is the average contents insurance value UK?

• There is no “average contents insurance value”. Everyone is different and spends their money in different ways. One person might spend thousands on designer furniture, clothes, and jewellery, whilst their neighbour might have different tastes and spend very little on these things, instead preferring to spend their money on holidays.

Is £50,000 enough for contents insurance UK?

•  If your contents are worth £49,999 to replace ‘as new’ then yes! If it would cost more than £50,000 to replace everything in your house, then no. A contents insurance policy will include a clause that requires you to insure all the items in your home (even things you wouldn’t replace) for ‘full replacement value’. If you don’t do this, you could find your policy is null and void.

What is high net worth home insurance?

•  A ‘high net worth’ home insurance product is one that is typically intended for those whose contents and personal effects would cost more than £150,000 to replace on a ‘new for old’ basis. For those whose contents are valued between £100,000 and £150,000, there are bespoke ‘mid net worth’ products available, which also offer enhanced cover and higher policy limits than a more traditional home insurance policy.

 What is considered a high value item?

• What is “considered a ‘high value item’” depends on who you are speaking to. For a typical home insurer, this could be an item worth a few thousand pounds. For a ‘high value’ or ‘high net worth’ home insurer, you are more likely to be talking about pieces worth in excess of £10,000 or possibly much higher.

What is not usually covered by contents insurance?

• There are two aspects to “what is not usually covered by contents insurance” – the ‘subject’ of the insurance and the ‘event’ that is insured. When it comes to certain items, contents insurance should cover most things you would normally expect to be found in a home – carpets, curtains, clothing, furniture, electronics, jewellery, pots, pans etc. Items that wouldn’t be included tend to be things like motorised vehicles (although some policies will include low powered vehicles that aren’t road registered, such as quad bikes) and drones (although some will include these as well). The ‘events’ insured will vary between certain types of cover, with some perhaps needing to be ‘opted into’ such as Accidental Damage.

How do I estimate the value of my house contents?

•  The best way to estimate the value of your house contents is to use our ‘contents calculator’ such as can be found on our website (https://api.lloydwhyte.com/app/uploads/2018/09/Contents-Calculator_Private-Client-Insurance-Interactive.pdf). Having the internet open when going through this exercise is advisable, so you can easily check retail values for key items. If you’re really struggling though, there are professional valuation companies who will provide ‘walk through’ assessments, designed to give a high level overview of your possessions.

What is high value item cover?

• When talking about ‘high value item’ cover, this is typically referring to those possessions that might be subject to a ‘single item limit’ and the individual pieces that might exceed this. What categories of item are subject to such a limit and how much it is will depend on the individual insurer and the terms of their policy. It is important to check your specific policy, but more often than not it will include jewellery, watches, other items made of or that contain precious metals, artwork, antiques, clocks, barometers and other ‘collectable’ pieces (i.e. stamps, coins, medals, chinaware, glass etc).

What policy covers specific high value items?

• Most home insurance policies will have a limit above which they consider an item to be ‘high value’, but this will vary considerably depending on the type of product and the insurer. With a traditional policy this may be in the region of £2,500, whilst for a ‘mid net worth’ product this will be more like £10,000 for jewellery or watches and £20,000 for ‘art, antiques or collectables’. A ‘high net worth’ policy will have even greater limits, ranging from £25,000 up to as high as £50,000 for jewellery and watches and anywhere between £35,000 and £100,000 for ‘art, antiques, or collectables’. If you’re finding that you’re having to specify a lot of items on your current policy, you may find you’re better served moving to a policy with greater limits.

Can you insure something for more than its value?

• Under a home contents insurance policy, you should be insuring an item based on its current retail value if you had to go out and buy it again as new. This differs slightly for items of artwork, antiques and collectables, where it is not possible to buy a brand new version. Instead, you should base the value on what it would cost to buy the item again from recognised art or antiques dealer. You shouldn’t really insure for higher value than this, as you shouldn’t profit from this type of insurance policy, and the insurer will ultimately only pay you the current market value at the time of loss, so any excess cover will simply result in you paying a higher premium than you need to.
• Under household buildings insurance, you are required to insure for the reinstatement/rebuild value of the property. In most cases this will be less than the purchase value, as you do not need to factor in the cost of the land on which the property stands. There are exceptions however, most often with Listed properties, where the rebuild value will commonly be similar or higher than the purchase price.

Is it better to insure for market value or agreed value?

• A home insurance company will generally require you to insure for the market value of an item when replaced ‘as new’. They will not typically allow you to insure for an ‘agreed value’ as doing so will generally mean that you are seeking to insure for less than the true replacement cost of an item and this is not something they can permit (and you would be in breach of contract if you did so). Conversely, if you are seeking to insure for an ‘agreed value’ that is higher than the replacement cost, they would not agree to this either as you should not be able to ‘profit’ from a home insurance claim.

Is it better to insure for market or retail value?

• For a general item of home contents, one that can easily be replaced, such as a carpet, television, or sofa, you should insure for the retail value so that you can easily replace it if something happens. For items such as paintings or antiques that are no longer in production and cannot be replaced with an identical, you will need to insure for the market value (dealer price), putting you in a position that you can at least replace it with a piece of an equivalent nature (or not suffering a financial loss if considered an investment). Current production models of luxury watches, such as Rolex or Patek Philippe, you can potentially insure for either; being in production still means that there will be a valid retail price, this normally being the lower of the two values, but given that the waiting times for many models are measured in years rather than months, you may wish to insure for the ‘market value’ so that you can instead look to the second hand market to replace it more quickly – either way, check with your insurer that they’re happy with what you are proposing to do, as some take different views on this to others and valuations may also be required.

Can I insure my Louis Vuitton bag?

• Of course! Designer clothing and accessories typically come under the heading of ‘general contents’. If you’re fortunate enough to have multiple Louis Vuitton bags or indeed a collection of other sought after accessories; even rare trainers, you might find you can insure them specifically as a ‘collection’ which may have the benefit of attracting some specific cover enhancements and could even be a slightly cheaper way to insure them.

What is high net worth versus ultra-high net worth?

• A “high net worth” client will usually own between £1million and £10million in assets, including their home and contents. An “ultra-high net worth” client will own a home(s) and possessions valued in excess of £10million. We cater for both high net worth and ultra-high net worth clients.

Don’t forget, we provide expert assistance across a wide range of insurance products, allowing you to have all of your policies with a single trusted firm of advisers.:

For your cars:

• High value vehicle insurance (those in excess of £75,000)
• Specialist family fleet motor insurance (one vehicle must be valued in excess of £75,000)
• Traditional motor insurance
• GAP insurance (not live yet – may need to wait and add this later depending how quickly the web copy is implemented)
• Excess protection insurance (not live yet – may need to wait and add this later depending how quickly the web copy is implemented)

For your properties:

• Holiday/second home insurance (UK and overseas)
• Holiday rentals insurance
• Buy-to-let property insurance

For your properties:

• Holiday/second home insurance (UK and overseas)
• Holiday rentals insurance
• Buy-to-let property insurance