Is It Time to Rightsize Your Insurance?

In a previous review of commercial claims¹, the Financial Conduct Authority highlighted some concerning gaps between business’ assets, and their levels of insurance cover. This problem doesn’t only apply to business insurance though, as many of us may be at risk of living with inadequate levels of cover when it comes to our homes,  contents, our personal possessions and even temporary construction and building projects.

So, what’s changed? Well, the cost of many items has quietly risen in recent years, and global issues with supply has caused  those costs to swell further still. Some collectibles and jewellery values are also driven by market values, and so they can rise exponentially when they’re more fashionable. At the same time, some insurance policyholders may be reluctant to spend time researching the costs of replacing their contents and possessions or to get their key items revalued regularly, leaving them potentially more vulnerable to a gap in cover. 

Why could you be at risk of underinsurance?

Things change, and it’s easy to suddenly find that your existing insurance cover doesn’t quite fit your needs anymore. It is important to review your sums insured on a regular basis, to ensure that you remain adequately covered. If things do go wrong, the consequences can be even more devastating if you have gaps in your cover.

One way to protect your home and its contents from insurance gaps is get your collections and higher value personal possessions professionally revalued from time to time. There’s no hard and fast rule about how often you should be doing it, but many insurers recommend seeking a fresh valuation between every 3-5 years.

Take back control of your cover

It may sound daunting but ensuring that you’re not underinsured doesn’t have to be complicated. Put some time aside, make a plan, and take it from there. The good news is that this is one of those jobs that you don’t have to do in one go and it gets easier once you’ve got your starting point.

Start by going from room to room in your home and carrying out an inventory.  This includes all home furnishings and electrical items as well as sporting equipment and anything of value in the garden or any outbuildings.

Towergate can provide handy forms to help make creating an inventory simpler, and you can take photos on your phone to keep clear records.

Download The Towergate Property Contents Checklist.

Don’t forget to list carpets, furniture and decorative items like wallpaper that increase in cost over time without you noticing! Your inventory needs to include more than jewellery and collectibles, it is important to consider the cost of replacing everything in your home.  

If you take photos or videos, file them away with your policy documents so you won’t have to remember small details and exact numbers of items. Try to file your evidence online and ensure its cyber protected. Photos and videos are also invaluable evidence of ownership if you do need to claim, and many of our customers use them for  high value items and collections.

Once you have all the information, it’s time to get those high value items revalued. If you need high value jewellery revalued now and then, forge a relationship with your jeweller, keep an eye on prices yourself, and don’t be afraid to ask for guidance if you’re not sure. Once you have contacts in place, revaluing will be easier going forward. Remember to think about items you no longer own since your last renewal, as it’s also possible to be paying for cover you don’t need.

Is your policy still right for you?

Rightsizing is about ensuring you’re on the correct policy, as well as checking your levels of cover. When you have your new inventory, break down the replacement cost of your contents and the cost of rebuilding your home separately and contact us if you need to make any changes to your sums insured.

Should you have a standard household policy?

If you have family contents amounting to more than £150,000 then together with your property value, you might benefit from a more bespoke mid net worth or high net worth insurance policy for your home, contents and personal possessions.

Underinsurance isn’t worth the risk

It’s worth taking the time to ensure that the sums insured included in your policy provides sufficient cover for your buildings and contents if things don’t go to plan in the future.

Remember to keep us updated if there are any changes you need to make to your policy cover at any time during the year , as well as at renewal.

Sources:

1: TR15/6:Handling of insurance claims for Small and Medium Sized Enterprises (SMEs).

This is a marketing article by Towergate Insurance