Home insurance: making sure you are properly covered

July 10, 2024

In times of inflation the prices of all goods and services are likely to rise. Home insurance is no exception. Yet despite high weather-related claims during a succession of bad winters, average premiums for home insurance increased by only 3% during the first quarter of 2024, according to the Association of British Insurers (ABI) recently.

Because of the protection home insurance offers, an estimated 34.67 million property insurance policies are forecast in 2024.

What does home insurance typically cover?

Home insurance typically comprises two components – building insurance and contents insurance. It does just what it says. Building insurance protects the homeowner against loss or damage to the structure and fabric of the building. Contents insurance safeguards the contents of any home occupied either by a homeowner (or, in the case of landlord insurance) a tenant.

While homeowners and tenants may reassure themselves that they have home insurance to protect their essential possessions, these policies must be kept under review to ensure that the appropriate total sums remain insured.

The importance of checking you have the correct sums insured 

The total sum insured represents the maximum amount your home insurer is obliged to pay out if you make a successful claim. If that insured amount is underestimated, you are likely to find that when you make a claim for lost or damaged items, the insurer’s settlement will be insufficient to repair or replace those items. That is true whether your claim is for damage to the structure and fabric of the building (or even its total loss) or items making up the contents of your home.

Have you made improvements to your home?

Although the total amount you insured your building and contents might have been sufficient at the outset, things change over time. You might have extended your home (a loft conversion or conservatory, for instance) or may have added to the contents. Moreover, the inevitable consequence of ongoing inflation may call for a review increase in the total amount you’ll need to be insured.

Are valuations correct for jewellery?

One of the questions we’re most frequently asked is whether home insurance also covers the risk of theft, loss, or damage to jewellery – it is, after all, in many cases likely to be among your most valuable home contents.

As we’ve explained, however, the answer is less than straightforward since your jewellery might or might not be covered – it all depends on your particular home insurance policy. Even where it is included, beware that the majority of policies not only restrict cover to a “single item limit” (the total insured sum on any single item of jewellery) but also a “maximum claim limit” that restricts the total insured sum for your entire collection of jewellery.

What all of that means, of course, is that you will need a realistic and accurate valuation of your jewellery so that you can determine an appropriate total sum insured. Fail to do that and you could find that the settlement of any claim you subsequently need to make is simply not enough to repair or replace damaged, lost, or stolen items of precious jewellery.

As an aid to keeping an accurate valuation, it will be prudent to retain the receipt for all pieces of jewellery that you buy along with any further valuations you make in the future.

Need help?

If you are unsure whether you have the correct sums insured, please feel free to call us – on 01702 826060 – for help and guidance.