What if your personal insurance has not kept up with your lifestyle? According to Sovereign, one in six high net worth individuals have insurance based on a valuation more than 20 years old and a Data monitor report indicated that as many as 75% of high-net-worth individuals are underinsured.
The risk of simple to calculate home insurance policies is that they may not truly reflect the value of your property and there will be fluctuations in value of many items you possess. If you downplay the real value of your possessions to save on insurance premiums for a regular household policy, this could be a risk should the worst happen.
The ownership of valuable personal assets therefore comes with important insurance considerations. The more a person owns, the more care they need to take in selecting the right kind of insurance. The wrong selection exposes the risk of being underinsured, leaving hard-earned assets unprotected.
And it isn’t just the super-rich for whom this is a concern. Anyone owning an asset or collection of assets worth more than £1,000 is probably underestimating the value of their possessions when it comes to getting them insured. Aside from owning a nice home, you might also own valuable collectables such as antiques, artworks, jewellery, watches, record collections, top of the range electronic equipment, musical instruments, designer clothing and accessories, high-quality furnishings and sports equipment. These items are identified as high-risk items by insurers, but if they aren’t specified then your high-value items might not be covered by your insurance. It is common to also use collectors’ items as an investment opportunity for savings and retirement funds, so it’s all the more important that these items are insured properly.
Considerations
Owning expensive assets and properties leads to complicated insurance appraisals, and they are easy to get wrong. Here are some considerations for taking out high asset home and personal insurance:
- If your home is a period property, standard market value assessments might not cover the cost of rebuilding, the need for specialist craftspeople or costly materials to reinstate period features.
- Although it’s possible to find the value of most things online, unique pieces of jewellery, or particular antiques or collections, should be evaluated by experts. Many owners will have never sought professional advice, and these items might be underinsured.
- Designer clothes and bags, luxury clothing and expensive furnishings can increase in value over time, a fact that is often overlooked.
- New additions to personal household assets should always be added to a policy, whatever time of year they are acquired, but their owners often forget to do this.
- Ask yourself if you understand the details of your policy. If you don’t, your possessions may be at risk.
Don’t take unnecessary risks
Unfortunately, many people with high-value assets don’t realise that some standard insurers aren’t providing adequate cover for their property and possessions. Should a claim need to be made for loss, damage or theft, they won’t be covered. It’s important to take an inventory of possessions, properly evaluate items and conduct regular reviews. But, the most important thing you can do is consult an expert who can understand your needs and find the right policy for you.
Our specialist staff offer advice and access to premium cover that will protect your personal property and possessions and remove the risk of underinsurance. Get in touch at privateclients@finchinsurance.co.uk
