Don’t be underinsured

It’s surprisingly common for homeowners to be unaware of the real value of their possessions. And, more surprisingly, many people who are, never actually work out the correct value and never get round to increasing their insurance cover accordingly. If you are under-insured, that is your household contents and the building itself are not insured for their total value, it is likely that any claims you do make will not be paid in full by your insurer.

Buildings insurance
Let’s start by looking at buildings insurance. Your policy will include the words ‘sum insured’. This is the amount of money your home is covered for and is the most your insurer will pay you – even if your home is totally destroyed by fire. It is also the amount it would cost to rebuild your home, its fixtures and fittings, and any outbuildings, plus demolition and architects’ fees. (Note that a rebuild cost is not the same as the current market value of your home, which could be a greater or lesser amount).

Some home insurance companies automatically provide cover up to a certain amount for the cost of rebuilding your home and any outbuildings (Privilege covers you for up to £1,000,000 as standard, although some properties are not eligible for this so check your insurance policy). However, if you make significant alterations to your home that are likely to add value to your property – such as adding an extension or conservatory, or completing bigger DIY improvements like a new kitchen or bathroom – you should contact your insurer to let them know as your level of cover may need to be increased.

Contents insurance
When it comes to home contents, your need to ensure that you have sufficient cover to replace everything in your home, including furniture, carpets and curtains, household/white goods, TVs, videos, computers, clothing and valuables, but not permanent fixtures like kitchen units or fitted wardrobes. It’s essential to review your level of cover on a regular basis, say every one to two years, rather than keeping it at the same amount each time you renew your policy.

There are other key times when you should check and possibly increase your cover. For example, when you make expensive purchases such as splashing out on a few pricey gadgets, such as plasma TVs or computers and gaming consoles, over a period of months. And if you move house, begin living with someone, or after a major event like a family wedding when presents are likely to be stored at home – all of these can make a difference to the value of your household contents.

And let’s not forget about Christmas. As higher-value items, such as mobile phones, music players and laptop computers, appear on more and more of our Christmas wish lists, it’s a good idea to check that you’re not under-insured over the festive season. Some insurance companies automatically increase cover over the Christmas period (Privilege automatically increases cover by 10% at Christmas and around the time of a family wedding). But, be warned - once this extra cover has expired, you could find that all those expensive gifts remain with family members inside the home, so check your level of cover at the start of the New Year.

Reviewing the situation
So, how do you go about reviewing your level of cover? Start by checking the date when you last amended your home contents insurance policy. Next, double check the level of cover you have and whether there are any exclusions (give your insurance company a quick call). Then make a list of everything you’ve bought since that date and compare it with how much you are entitled to receive should you make a claim. If the value of your new purchases pushes you over that amount, then get in touch with your insurance company and ask them to amend your cover. Simple!

With access to all these benefits, why not get a Privilege Home Insurance quote from us today?