A frequent conversation I have with clients is regarding the value of contents inside their home, and how much they should be insuring for.
And here lies the difference between speaking to a broker against arranging your cover online or through a call centre, where there is little prompting to consider the value of your worldly possessions so you can arrange adequate insurance.
The usual answer is to read it from the current insurance schedule. “Twenty five thousand nine hundred and forty five”, says the person on the other end of the phone, from their four bedroom executive home.
“OK”, I say, “and when did you last review that”? “Well we just let the policy increase it every year”, replies the client, which turns out to be a figure seven years old from when they lived in a much smaller home.
And so the helpful conversation goes on and the client realises that when they moved in to this new larger house it cost them £5,000 for carpets, to replace furniture would cost around £15,000, there’s at least four televisions, two PC’s, 3 laptops and before you know it you are heading towards double the current amount not even including suits, clothes, shoes, jewellery and what ever is in the loft now.
The problem with under-insurance is how it could affect your cover should you have a claim, especially a large claim. If you are under-insured by half insurers can either pay just half your claim under something called the “average clause”, or void your policy altogether as you have provided incorrect facts.
My view is why pay for an insurance policy that might not pay out when you need it to? It’s a false economy. You may as well spend some time getting it right, and let the broker worry about getting the right premium deal for you.
The quality of a policy is another issue. For example, claims for leaking pipes are one of the most common. Not only do you have to repair the damage caused by the water but you also need to find the leak to fix it.
I have been surprised over the years how many policies don’t insure tracing and accessing leaking pipes, or just give a few hundred pounds of cover. If tracing the leak involves removing a stud work wall with expensive tiles or pulling up all your floor boards you could be left with the bill.
A guide to valuing your contents is available on my website and as usual I am happy to give my advice for free.
For insurance advice call Jeremy at Entrust Insurance Brokers on 0844 272 5358.
Visit us at www.entrust-insurance.co.uk
More on home insurance at:
www.entrust-insurance.co.uk/standardhomeinsurance.html
and
www.entrust-insurance.co.uk/prestigehomeinsurance.html