High Net Worth Homeowners Risk Being Under Insured

As many as 60% of high net worth homeowners risk being under insured, according to a leading insurance company.

Hiscox, a home and contents insurance company, has found that the majority of those buying high net worth insurance undervalue the contents of the things they own and fail to buy the correct level of cover.

Many forget to insure items they have inherited or fail to realise how the value of expensive jewellery has increased recently. The same applies to objects of art and antiques.

These findings come as further research carried out for Hiscox by YouGov shows that 67% of high net worth homeowners are confident they know the value of their home and its contents – a confidence likely to be misplaced in light of Hiscox’s own findings.

“After a while even the special things in your home can seem like part of the furniture. This means that when it comes to estimating the value of your home contents, it can be easy to forget about items that actually hold reasonable value.”, says Andrew Cheney, risk and valuation advisor at Hiscox.

Being underinsured means that should a claim be made, any pay out will not cover the total value of the items lost or damaged. The insurance company will estimate a percentage of under insurance and will deduct this from a claim.

It makes sense to regularly take stock of the contents of the home, keeping valuations up to date and making sure that insurance policies match the total value of the possessions insured.

It is “important to consider all items in the home and not just those that are front of mind. Using a check list can help people conduct an accurate self assessment as it prompts them to think about including the easily forgotten items such as the curtains, carpets and bed linen.”, Cheney adds.

To help, Hiscox have launched a contents calculator iPhone app that can be used to systematically go through the home and garden to record the approximate value of all possessions. The app is free to download via the App store or from the Hiscox web site.

MoneyHighStreet.com comment: As well as making sure you have accurate information on the value of your contents, you also need to consider individual items that have a high value and make sure these are covered by your home contents insurance.

Often with standard home insurance, cover is provided for such items up to a ‘single item limit’. This is set at different levels but on average will be around £1500.

If you have a number of high value items you may better off to consider a High Net Worth insurance policy.

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