Are you sure you’re insured?
DON’T BE COMPLACENT WHEN IT COMES TO COVERING YOUR HOME AND CONTENTS, WRITES TRICIA PHILLIPS
HALF the people who have home insurance admit they do not know if the details they provided to their insurer were 100% accurate.
That’s not surprising when research from Swinton reveals that almost 50% of us made a rough calculation of the value of our home contents when we took out cover, while one in 10 said they made a blind guess.
Home insurance is a product where buyers typically don’t take enough care – with Swinton revealing one in five people have no idea what their policy does and doesn’t cover.
This can leave many people out of pocket with large numbers being caught out underinsured – costing an average £500 each.
Mike McGrail, senior product manager at Swinton insurance group, says: “Contents insurance is something that we know can cause confusion. We encourage people with any doubts to speak to a professional for guidance.
“As a simple guide, we’d also always say, in the first instance, if you’re unsure what kind of items are covered, imagine turning your house completely upside down. Anything that falls out is usually classed as contents and is unlikely to be covered by buildings insurance alone.”
Latest figures from the Association of British Insurers show that one-in-five households don’t have home insurance. That’s their personal choice and they may be happy taking the risk of losing their possessions.
But, more worrying are the millions at risk of having the wrong cover, and despite coughing up premiums, getting caught out when disaster strikes.
If you are going to take out home insurance then you need to make sure you get the right cover at the right price. When working out the value of your possessions don’t just go for a blanket amount. You could end up paying over the odds for cover you don’t need and still find your most precious belongings are not protected.
Property insurance costs an average of £308 a year in 2016, down 10% from its peak in 2012.
Insurers paid out £8.1million per day in claims at an average of £2,250 each time. Weather-related incidents topped the list of claims costing an average £2,100, followed by escape of water at £2,500 and fire at £14,900.
Remember that building insurance and contents insurance policies cover different things.
Building insurance gives protection against damage to the physical structure of your home such as the walls, roof and windows. It also covers permanent fixtures which can’t realistically be removed and reused, such as fitted kitchens and bathrooms.
Home contents insurance covers everything else, from jewellery and artwork or antiques to computers.
Be sure to tot up the cover you need, don’t just guess. It may sound like an impressive amount if you get cover for £50,000, but it could mean you have too much cover and that particular possessions still aren’t covered.
Possessions that cost more than £1,000 to £2,000 and upwards to replace are classed as high-value. These are often not automatically covered on a standard home insurance policy – unless they are a named item.
Make sure you know what the maximum value is for any individual item on your policy. Most insurers have limits, which can be as low as £1,000.
Find out if any items above that value can be added to your policy as a named item. Or you may need to take out extra cover or find a specialist insurer.
Home contents cover commonly only covers your possessions for loss, theft or damage when they are in your home.
If you take items out of your home – such as jewellery that you wear, laptops or a handbag – make sure you have personal possessions cover on your policy. Most firms offer this as an added extra. It is advisable to review your cover each year. Some items may increase in value and you may have purchased new items, so you might need to increase the total level of cover you have.
It is worth taking photographs of valuable items as this could help prove you owned them if you need to make a claim. A photo could also help the police recover them.
When it comes to renewal don’t simply stick with your current insurer – the most competitive provider changes from year to year. Use comparison websites to compare quotes, be sure to check the levels of cover you are getting on cheaper policies and keep an eye on the excess demanded by cheaper cover.