Seasonal sum insured increases – is it enough?

November 21, 2022

‘Tis the season to be merry – whether you’re at work or at home, Christmas is a time for festive celebrations.

It means that businesses are likely to be stocking up on all those products likely to be in greater demand while households, too, buy in extra Yuletide fayre and presents to go around the tree.

That’s the very reason why some (but not all) commercial insurance policies and home contents policies offer a temporary seasonal increase in their respective total sums insured. As this Christmas time rolls around you might want to ask yourself whether any such increase is enough to cover your potential losses.

What are the seasonal increases? 

Seasonal increases can come in several different ways – depending on the particular season in question and the nature of the insurance cover:

Home insurance

• if it’s your home insurance, for example, a temporary seasonal uplift of the total contents sum insured might span the whole period from the beginning of November through to the end of December;

• if the temporary increase in the contents insured is for a special occasion such as a wedding – and the flood of wedding gifts you expect to receive – insurers typically allow that extra cover to remain in place for 30 days on either side of the occasion itself;

Commercial insurance

• if you are insuring your business operations, temporary seasonal increases in the sum insured for your stock in trade typically may apply to both the Christmas and Easter holidays – when you are likely to be carrying more than your usual stock.

What percentage is the sum insured increased by?

The precise amount of any temporary seasonal increase will depend on your particular policy and vary from one insurer to another.

With respect to home contents insurance, for example, the value of contents covered might be temporarily raised by a specific amount (typically between £2,000 and £5,000) or it might be increased by a proportion of the existing sum insured – by 10% or 15% of the overall value of your home contents.

For commercial policies, any temporary season increase in the sum insured typically applies only to the stock you carry rather than the general contents of your business premises. The increase may range from anything between 10% and 25% of your normal, existing value of stock in hand.

Tips for commercial customers 

Since temporary seasonal increases in the sums insured can vary widely from policy to policy and between different insurers, it is important to check whether any increase that is offered under the provisions of your existing insurance policy is sufficient for your needs and business circumstances.

In your particular business, for instance, you might never be especially busy at either Christmas or Easter but nevertheless enjoy a significant peak in sales – and, therefore, the stock you need to hold – during the summer months.

In that case, you might be able to negotiate with your insurer special terms for a temporary increase in cover for your stock during that busy season. If you are unable to strike such an agreement, you’ll need to ensure that year-round the total sum insured for what you have in stock reflects your busiest trading period.

Tips for homeowners

When the Christmas or Easter holidays are approaching – or your home is likely to fill with extra valuable contents such as wedding gifts – make sure to check you’re your total contents sum insured accurately reflects their value.