How to make sure you’re not underinsured

Whether you’ve got a combined buildings and contents insurance policy, or just contents, it’s really important to make sure you’re fully covered. If the estimate to rebuild your house, or the value of the goods inside your home are too low, and you need to make a claim, you could find that you’re underinsured and the insurer could reduce your claim.

For example, if you value your contents at 25,000, but in fact, they’re worth £50,000, you’re underinsured by 50% and your insurer may reduce your claim by 50%. This is because you’ve only been paying a premium to value of £25,000. If you needed to cover £50,000 of contents, you’re premium would have been higher.

Of course, as an insurance broker, A-Plan can help advise you about the level of cover you need and what your sums insured should be. However, to help get you started, here’s some of the things you should look at when reviewing your home insurance.

Check the sums insured on your policy document:

  • Remember, market value isn’t the same as the cost to rebuild your property if the worst was to happen. You can do a quick calculation on the cost to rebuild your home using an online calculator to see if it still matches the sums insured on your policy. Try the BCIS free calculator – you’ll need to register your details and log in. It’s straight forward to use, but you will need to know the property’s floor area by square meter.
  • Check single article limits to make sure your cover accurately reflects your current situation:
    • Have you recently bought an expensive bike during lockdown or received any heirlooms that that you now need to add as a specified item?
    • Do you have children that now have tablets, smartphones or other devices?
  • Do you need items covered away from the home?
  • Look at the cost to replace the item now, not when you bought it.
  • Valuables or items that might be rising in value – price of gold has been steadily increasing during 2020, so it’s worth checking how much your items of gold might be worth now.
  • Calculate a value for everything else – think about everything you’d need to replace, if something did go wrong – from carpets and curtains, clothes and jewellery, household tech to the garden shed and its contents. Try the Which? contents insurance calculator to see if you need to update your cover. Alternatively, you can talk to us, we’d be happy to help you with your valuations.