Don’t Underestimate the Value of your Belongings
Our adviser Sophie McMillan explains the mistakes many people make when looking to insure their home:
Did you use the purchase price of your property when choosing the amount your home should be insured for? Did you decide you only have 10 thousand pounds worth of contents in your house? These are two very common, very real examples of mistakes people make when selecting their home insurance.
If I were to tell you that on average most people have roughly around 40 thousand pounds worth of contents within their home would you believe me?
Let me put you in a scenario:
You insure your contents for £20 000.
The worst happens and your kitchen sets on fire, you lose all your belongings, there is smoke damage everywhere and you are left with just the clothes on your back.
Here's what the insurance company would do:
- Send out a loss adjuster to assess the damage – as part of that assessment he or she would look at your contents and in doing so discover there is £40,000 worth of contents in the property. (Remember you stated you only had £20,000)
- The insurance company then decides you were underinsured by 50%.This results in your claim being reduced to 50% of the amount you insured your contents for.
- You would be left with £10,000 to replace the entire contents of your home.
This is a very real example of the potential risk of under-insuring. We make sure when insuring your property, you include everything. Your sum insured is not based on how much you think you need; it's based on how much your belongings are worth. Go through every room and write a list of everything you own and how much each item is worth. You will be surprised… the average British woman's wardrobe is worth around £4000!
Don't forget the amount you insure your building for must go off the re-build cost not your purchase price, if you are unsure find out here: https://abi.bcis.co.uk/.
Always remember cheaper is not necessarily better… especially as all insurance is the same until you need to make a claim.