Is your home properly insured?
BY READERS DIGEST
1st Jan 2015 Insurance & Legal
If you're paying too little for your insurance premium, you risk being underinsured. This can have a devastating impact should you need to make a claim, and yet it’s been reported that 20 percent of homes are underinsured. Follow these tips to avoid being caught short.
Say you have an insurance policy that covers £40,000 of household contents, but the actual value of all the items in your home is £80,000. This means you’re underinsured by 50 per cent and so, if you had to make a claim for £30,000 of stolen items after a burglary, you will receive a payment of just £15,000.
Precious metal and diamond prices can change drastically over short periods of time, amplifying the risk of being underinsured. The value of gold has increased by more than 200 percent in the last ten years. The popularity of expensive gadgets, such as laptops and tablets, also increase the risk of underinsurance.
Calculating the true value of your contents can be difficult, but it’s important to give information that’s as accurate as possible.
Three tips to help avoid being underinsured:
- Get an up-to-date valuation. If you own precious items, arrange valuations in order to ensure the value specified on your insurance policy is correct and appropriate for your needs.
- Make sure the valuation contains detailed information. It’s important to have a professional valuation, so there’s no confusion in the event of a claim. A valuation stating “A Solitaire diamond ring: £20,000” is ineffective. There are no indications of carat weight or grading, details of the mount or whether the ring is antique or modern. This level of information is vital when seeking a replacement.
- Ensure your home insurance policy matches your needs. Ensure your home insurance policy adequately covers the value of your contents, so your possessions are properly protected.
