You probably have insurance on your belongings, but do you know how easy it is to miscalculate their value?
What do you think the average cost of maintaining a £25,000 or £30,000 detached house is? In fact, that figure is estimated to be over £45,000 for a typical home. Apart from your “moving objects” carpets, furniture, curtains, electrical appliances that you have bought in recent years, the sudden increase can probably be explained. It’s not uncommon to have three or four cell phones, a few computers, maybe even a laptop. Then TV. In addition to the large family set, ready for digital widescreen HD, singing and dancing, there’s probably one more in the kitchen and two or three more in the bedrooms, not to mention DVDs and VCRs. The kids probably have iPods, Gameboys and everything else out there right now. Don’t forget your CD collection – Norwich Union values them at £10 each and a DVD.
Aside from the risk of damage, all of the above items are very attractive to the thief as they are easy to handle and find an easy sale. Don’t forget the garden, lawn mowers and garden machinery, shed and garage contents, patio furniture, and even planters and hanging baskets. The cost of plants can add up too!
If you need to make a claim, it is important that you are uninsured. If the insurance company believes that you are not adequately insured, the damage will not be paid in full. This means if you insure your contents for say £20,000 and your insurance company estimates that it will cost £30,000 to replace it you will have a deficit of £10,000.
Insurers work differently. For example, Norwich Union Direct, a leading insurance company, will pay you the sum insured. It is up to you to fund the difference. More Than tells us their underinsurance claims policy aims to reduce it to 20%. really more.
They take steps to keep customers informed of their coverage, which is why they recently increased it by 25% for all of their customers.
These increases apply to upcoming subscription renewal dates. No doubt other insurance companies will soon be considering the following claim.
While you’re considering a reassessment, it might be time to review your building’s current insurance numbers. In addition to your home, garage, and outbuildings, you may have fixed items such as lights, hot tubs, and fixed garden features. You are covered by home insurance, not your belongings. Your insurer will usually make a quote based on the number of bedrooms etc and your zip code. The sum insured is, of course, the cost of demolishing and clearing the property and rebuilding your home on the current property.
To help you re-evaluate your property and for further advice there is a handy homeowners checklist from the Association of British Insurers, www.abi.org.uk.
There are a large number of insurance companies that deal in both maintenance and home insurance and, as always, it pays to shop around.