- The single article limit for valuables on some home contents insurance policies can be as low as £750;
- Only 11% of home contents policies automatically cover your personal possessions, including jewellery and other valuables, outside of your home;
- 70% of policies don’t cover items in a matching pair or set;
- Take a selfie and don’t throw away the instructions - photographs, receipts, valuations and instruction booklets are essential proof of ownership and value in support of a claim.
Over recent years the value of precious metals and gem stones has increased significantly – potentially leaving many items of jewellery and other valuable items, such as watches and coins, underinsured. GoCompare Home Insurance is warning home contents customers that they could face problems if they need to make a claim and their insurer finds they have underestimated the value of their possessions.
Home contents insurance premiums are, in part, calculated on the value of the possessions insured. If in the event of a claim, an insurer decides that a policyholder has miscalculated the value of their home contents, the insurer can reduce its liability by only paying out a proportion of the claim. But, if the insurer suspects that a policyholder has deliberately undervalued the replacement cost of their belongings - they can refuse the whole claim.
A review of 436 home contents insurance policies* revealed a huge variation in the level of financial protection they provide. Cover levels, either presented as a percentage of the overall value of the contents or as a monetary limit, vary from £3,000 to £60,000.
Insurers also limit the amount they will pay out for an individual item. Again, this varies widely between policies (from £750 to £15,000 or a percentage of the sum insured) but typically policy limits are around £1,500 to £3,000. If you have items worth more than the limit shown on a policy, you’ll need to speak your insurer to arrange for them to be listed separately. This may slightly increase your premium but will mean your valuables are covered to their full value.
The research also found that most home contents insurance policies don’t automatically cover your possessions outside of your home. Only 11% of policies include cover for personal belongings while you are out and about as a standard policy feature. The majority (87%) require you to top-up your insurance with ‘personal possessions’ cover which generally covers items against accidental loss, damage or theft away from home.
Most (70%) home insurers exclude cover for items in a matching pair or set, so if you lost one half of a pair of earrings they would not have to pay out for the value of the set, only for the damaged or missing piece. Only three policies offer this cover as an optional extra while 29% insure matching items and sets as standard feature.
Ben Wilson, spokesperson for GoCompare Home Insurance commented, “For many people, jewellery and other valuable items hold both financial and emotional value. While the sentimental value of some items such as jewellery and family heirlooms may make them irreplaceable, having the right insurance in place can give financial protection if they are lost or damaged.
“The value of alternative assets, like gold and silver fluctuates so, we recommend that people have their precious items revalued regularly and review their insurance accordingly. Likewise, if you inherit jewellery, coins or a work of art, but are unsure of its worth, it’s wise to arrange a valuation to make sure it is adequately insured.”
Ben Wilson concluded, “In the unfortunate event you to need to claim for jewellery or other valuables, it’s your responsibility to prove their value and your ownership. We recommend you keep receipts or bank statements, valuations and any instruction booklets in a safe place, separate from your valuables. Insurers also accept photographs in support of claims, so it’s a good idea to snap a selfie while wearing insured items of jewellery or watches. However, we wouldn’t recommend you ‘advertise’ your valuables by sharing these photos online.”
For more information about insuring valuables and jewellery, see GoCompare's dedicated guide page.
Notes to editors:
*Source: Defaqto Matrix of 436 home contents insurance policies (8 March 2017) – instant and unbiased market and competitor intelligence, from independent financial researcher Defaqto. Percentages are rounded up to the nearest whole number.
**62% of policies provide from £1,500 to £3,000 worth of cover.