Is Your Gold Underinsured?

Do you have all your valuable items, including gold, adequately insured or are you at risk of being underinsured?

Research by MoneySupermarket shows that the number of British consumers specifying items of gold on their home insurance policy has more than doubled over the past two years.

That said, homeowners are potentially leaving themselves underinsured due to the rising cost of gold.

The reason being is that although the price of gold has risen by 43% over the past two years, the average insured value of gold listed on policies has only risen by 5.8%.

Although a number of adults have recently bought items of gold, some purely for investment, few have added their purchase to their insurance policy as either they don’t believe the value is high enough or they simply can’t be bothered to add it as a specified item their policy.

Julie Fisher, head of home insurance at MoneySupermarket, said: “I urge people to make sure the increased value of their gold is reflected in their insurance policies rather than simply rolling over the insured value year after year.

“A gold ring, which may have cost a couple of hundred pounds several years ago, may now be worth four or five times that value, so it is worth seeking a profession evaluation.

“If you underinsure items on your policy, many insurers will invoke a condition of average clause which means you would only receive a percentage of the actual value of an item should you make a claim.

“Additionally, it is essential to add any specified items over £1,500 on your home insurance policy to ensure you don’t take any risks which mean you are not covered for those items in the event of an accident or burglary.”

MoneyHighStreet comments: “Regularly reviewing the value of your home contents is vital, not just when you purchase new items or perhaps when your receive items through inheritance.

“Apart from risking being underinsured, homeowners waste a staggering amount of money each year as they automatically renew home insurance with their existing provider.

“At a time when most are trying to save money it is crazy to think that so many homeowners don’t take the time to compare home insurance deals when their renewal hits. Using comparison websites such as MoneySupermarket.com, Confused.com and Gocompare.com this comparison can be done quickly and efficiently.

“At the end of the day the key point is to buy the home insurance cover you need. Don’t miss items or try and cut too much to save money. Equally don’t just opt for the cheapest price if as a result you end up with an inappropriate policy.”