New research from Hiscox reveals that 60% of high net worth homeowners are underestimating the true value of their possessions, leaving them at risk of being underinsured.
The insurer analysed the results of surveys carried out on behalf of their clients over the course of a year. In Hiscox’s experience, many homeowners are surprised when they discover the value of the things they own. Many have not considered the items they have accumulated over the years, items inherited or fluctuations in the value of jewellery, art or antiques.
These findings come as further research carried out for Hiscox by YouGov shows that 67% of high net worth homeowners are confident they know the value of their home and its contents – a confidence likely to be misplaced in light of Hiscox’s own findings.
Andrew Cheney, risk and valuation advisor at Hiscox, comments: “After a while even the special things in your home can seem like part of the furniture. This means that when it comes to estimating the value of your home contents, it can be easy to forget about items that actually hold reasonable value.”
The consequences of being underinsured could mean that in the case of a loss, the payout will not cover the total value of the items lost. Regularly taking stock of contents, getting regular valuations and reviewing insurance policies, mean homeowners can then find the right insurance cover to suit their needs.
Cheney adds: “People spend their money in very different ways: some accumulating art collections, others designer labels and accessories. It is therefore important to consider all items in the home and not just those that are front of mind. Using a check list can help people conduct an accurate self assessment as it prompts them to think about including the easily forgotten items such as the curtains, carpets and bed linen.”
Hiscox has launched a contents calculator iPhone application to help homeowners make a more accurate assessment of their home contents. This could be used to go through the value of possessions.
Hiscox has also put together an underinsurance trigger list to help people think about the value of their possessions:
Price changes: items move in and out of fashion or as demand increases, so do prices. A recent example is the value of jewellery which may have increased due to a rise in the value of gold. Homeowners who have not had their jewellery appraised in the last few years run the risk of being unable to replace a loss at current retail levels
– Accumulation: possessions grow over time. A set of crockery, new mirror, painting, vase, clock, watch or designer handbag – the value of these items really can add up over time
– Upgrading: over the years, belongings are replaced with newer, better models – for example, a modern luxurious sofa replaces the old one or some teak garden furniture replaces the plastic set
– Interests broaden over time: CD and book collections, pottery and works of art all come with a value
– Leisure pursuits widen: golf clubs, sporting apparel, fishing equipment – the list is endless
– Children happen: with them come a whole variety of clothes, accessories and toys
Source : Hiscox Press Release
