Very few people go through a process of evaluating the total current replacement cost of all of their household contents and possessions. This is why 4 out of 5 don’t buy enough cover.
In the event of a small loss this is unlikely to create a significant problem, however in the event of a serious loss under-insurance can occur with serious implications.
Most UK insurance policies contain an under-insurance clause that can proportionately reduce the claim if the amount of cover purchased is insufficient. Imagine having to contribute 20% of the repair cost after a fire?
Spending a little time when you first arrange your cover to assess your needs will be a wise investment if you suffer a serious loss. Reviewing the numbers every couple of years is similarly prudent.
Most UK policies also contain inner limits for
single items or for collections of what they deem to be valuables. Some policies claim to offer unlimited cover but when you come to make a claim they can be far from unlimited.
Another key consideration when insuring contents and possessions is the extent of choice you will have when it comes to making a claim. If you are happy to be told how your claim will be settled, for example who will carry out repairs, replace damaged items or what you will be paid, then a standard policy is sufficient. If you would like to have a say in this then you will need something more bespoke.
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