Research Reveals Many Homeowners Do Not Have The Right Level of Insurance
When we are seeking insurance we will at some point need to estimate how much our household items are worth and whilst we can determine items such as televisions and freezers rather easily, it can be harder to come up with a total price for other areas.
Items such as DVD collections and a wardrobe of clothes can be harder to determine and so we must think of other ways to determine their worth. But this could mean that many people out there are underinsured when it comes to home insurance.
The home insurer LV= recently unveiled the results of the study carried out on their behalf by Opinium in September 2009, which reveals the true extent of the problem and particularly highlights the amount of people who are seriously undervaluing their clothes collection.
According to LV=, people on average tend to estimate their clothes at around £1,600 and £1,300 when it comes to jewellery and watches. However, the true values could be much higher, with experts at the insurance company estimating that the average female wardrobe could be worth as much as £7,000, with a further £2,000 added when factoring in jewellery and watches.
Men’s wardrobes are estimated to be worth slightly less than women’s, but at £5,000 this still comes in much higher than the amount for which is being insured.
It means that if a household is targeted by thieves, succumbs to flooding or is hit by fire or any of the other dangers facing the home, then people will be left seriously out of pocket when they try to replace lost or damaged items.
“When valuing their contents people just tend to think about expensive jewellery, electronics and items of furniture such as sofas, beds and dining tables and forget how much it would cost to replace their clothing, shoes and everyday jewellery should the worse happen,” said Emma Holyer of LV= Home Insurance.
She continued: “Although it’s a relatively small percentage of claims where we see an entire wardrobe’s contents destroyed if you are underinsured you could find that your insurer will reduce the amount they pay out to reflect the cover taken out.”
As a result, when it comes to valuing possessions in seeking insurance, it might be wise to consider the individual costs of items rather than simply thinking of one overall amount. It is also wise to be aware of the specification of the policy so that you are not caught out in the long run.
Source: LV= Press Release Oct 2009