Tricky insurance question that almost everyone gets wrong – it could cost you thousands of pounds --[Reported by Umva mag]

MILLIONS of households are falling foul of a home insurance mistake that could end up costing them thousands of pounds, new research for The Sun has found. Undervaluing all of the contents in your home can see you having to fork out over the odds if something gets stolen or damaged – while overvaluing it could void your insurance policy altogether. GettyA home insurance mistake could prove costly[/caption] And recent research from GoCompare, provided exclusively to The Sun, has revealed that an estimated 5.6million households are making the mistake of misjudging the value of their items. We exclusively revealed earlier this year that a surge in the price of gold has potentially left thousands of households underinsured on their contents policies. Add to that undervalued furniture, clothes and electronics, and you could end up having to fork out even more from your own pocket, despite thinking you were covered. Nathan Blackler, home insurance expert at GoCompare, said: “If you underestimate the cost of replacing your possessions, you could find that in a worst-case scenario, you make a claim and don’t receive enough to replace or repair everything you need to. “Worryingly, our research shows that more than 5.6 million households in the UK are underinsured – and a staggering 9.3 million households don’t have contents insurance at all.” Of course, accurately measuring the value of your contents means you could end up paying out more for a policy if it turns out it’s worth more than you thought. But, the average cost of a contents-only policy in the second quarter of this year was only £137, according to the Association of British Insurers, so any increases will likely be much lower than the cost of being underinsured. Despite this, GoCompare said a staggering amount of households don’t know how to accurately calculate the value of their possessions. In a YouGov survey of 2,000 adults carried out in October 2023, only 24% of respondents said they could accurately calculate how much their contents were worth. That means over three quarters – 75% – could not accurately measure how much their possessions cost, leaving them at risk of losing out if they come to make an insurance claim. But it’s not just underestimating the value of your items that could end up costing you. If you overestimate the worth of your contents, you could end up paying more for the premiums than you actually need. And inflating the cost of your items could also invalidate your policy if your insurer decides you exaggerated, leaving you with no cover at all – and potentially a huge bill. How to calculate the value of your contents accurately Knowing how to accurately value your possessions can seem daunting, especially if you’ve got a treasure trove of goods inside your home. But there are some ways to ensure you are doing the best job possible, GoCompare said. Save receipts for any high-value items Saving receipts when you’ve bought a high-value item isn’t just helpful if you’re looking for a refund. Knowing how much that Panasonic TV or Dreams bed cost will help ensure your contents policy is up to date and accurate. GoCompare also said it will help you avoid exceeding the single article limit on your policy too. This is the maximum amount an insurer will pay out for an individual item when you make a claim. But undervalue one particular item and it could mean you have to fork out for anything over that limit. Whenever buying anything new that’s of worth, make sure you add it to your contents insurance policy too, so everything is up to date and accurate. Walk through your home It might seem obvious, but walking through the entirety of your home will help flag items you might not otherwise have thought of including in your policy. Make sure to include anything that might be stowed away in lofts or basements too, like carpets, curtains and garden furniture. Once you’ve compiled a list of everything, try your best to estimate their value by researching similar items online. Pay particular attention to antiques and valuable You might not want to estimate the value of any antiques and highly-prized valuables like jewellery though. In this instance, getting a valuation from an expert is advisable, GoCompare said. This is also another good way to check nothing exceeds the single article limit. You can get an antiques dealer to do this for you, or you could try one of the major auction houses like Sotheby’s or Bonhams. Use a contents insurance calculator Price comparison sites like Confused.com and GoCompare have contents insurance calculators you can use to get an estimation on what your possessions are worth. Meanwhile, a number of insurers have their own calculators, including Admiral, Direct Line while J

Oct 11, 2024 - 06:44

Tricky insurance question that almost everyone gets wrong – it could cost you thousands of pounds --[Reported by Umva mag]

MILLIONS of households are falling foul of a home insurance mistake that could end up costing them thousands of pounds, new research for The Sun has found.

Undervaluing all of the contents in your home can see you having to fork out over the odds if something gets stolen or damaged – while overvaluing it could void your insurance policy altogether.

a woman is sitting at a desk with a calculator and a cell phone and a laptop

A home insurance mistake could prove costly[/caption]

And recent research from GoCompare, provided exclusively to The Sun, has revealed that an estimated 5.6million households are making the mistake of misjudging the value of their items.

We exclusively revealed earlier this year that a surge in the price of gold has potentially left thousands of households underinsured on their contents policies.

Add to that undervalued furniture, clothes and electronics, and you could end up having to fork out even more from your own pocket, despite thinking you were covered.

Nathan Blackler, home insurance expert at GoCompare, said: “If you underestimate the cost of replacing your possessions, you could find that in a worst-case scenario, you make a claim and don’t receive enough to replace or repair everything you need to.

“Worryingly, our research shows that more than 5.6 million households in the UK are underinsured – and a staggering 9.3 million households don’t have contents insurance at all.”

Of course, accurately measuring the value of your contents means you could end up paying out more for a policy if it turns out it’s worth more than you thought.

But, the average cost of a contents-only policy in the second quarter of this year was only £137, according to the Association of British Insurers, so any increases will likely be much lower than the cost of being underinsured.

Despite this, GoCompare said a staggering amount of households don’t know how to accurately calculate the value of their possessions.

In a YouGov survey of 2,000 adults carried out in October 2023, only 24% of respondents said they could accurately calculate how much their contents were worth.

That means over three quarters – 75% – could not accurately measure how much their possessions cost, leaving them at risk of losing out if they come to make an insurance claim.

But it’s not just underestimating the value of your items that could end up costing you.

If you overestimate the worth of your contents, you could end up paying more for the premiums than you actually need.

And inflating the cost of your items could also invalidate your policy if your insurer decides you exaggerated, leaving you with no cover at all – and potentially a huge bill.

How to calculate the value of your contents accurately

Knowing how to accurately value your possessions can seem daunting, especially if you’ve got a treasure trove of goods inside your home.

But there are some ways to ensure you are doing the best job possible, GoCompare said.

Save receipts for any high-value items

Saving receipts when you’ve bought a high-value item isn’t just helpful if you’re looking for a refund.

Knowing how much that Panasonic TV or Dreams bed cost will help ensure your contents policy is up to date and accurate.

GoCompare also said it will help you avoid exceeding the single article limit on your policy too.

This is the maximum amount an insurer will pay out for an individual item when you make a claim.

But undervalue one particular item and it could mean you have to fork out for anything over that limit.

Whenever buying anything new that’s of worth, make sure you add it to your contents insurance policy too, so everything is up to date and accurate.

Walk through your home

It might seem obvious, but walking through the entirety of your home will help flag items you might not otherwise have thought of including in your policy.

Make sure to include anything that might be stowed away in lofts or basements too, like carpets, curtains and garden furniture.

Once you’ve compiled a list of everything, try your best to estimate their value by researching similar items online.

Pay particular attention to antiques and valuable

You might not want to estimate the value of any antiques and highly-prized valuables like jewellery though.

In this instance, getting a valuation from an expert is advisable, GoCompare said.

This is also another good way to check nothing exceeds the single article limit.

You can get an antiques dealer to do this for you, or you could try one of the major auction houses like Sotheby’s or Bonhams.

Use a contents insurance calculator

Price comparison sites like Confused.com and GoCompare have contents insurance calculators you can use to get an estimation on what your possessions are worth.

Meanwhile, a number of insurers have their own calculators, including Admiral, Direct Line while John Lewis also has one.

In any case, when it comes to contents insurance, always use a price comparison site to find out the best deal to suit your needs.

What is home insurance?

Home insurance is designed to cover you in the event of fire, flood, or theft or loss of any item inside it.

There are two types of home insurance policy – contents and buildings.

Buildings insurance covers the cost of repairing any damage to the structure of your property which might have been caused by a fire or flooding.

The “building” includes elements like your roof, walls and floors as well as permanent fixtures such as windows or fitted kitchens.

Contents insurance says what it does on the tin – it covers you in case the contents of your home are damaged, lost or stolen.

You can buy either buildings or contents policies separately, or combined so you are covered across all scenarios.

Not all home insurance policies cover the same things though, so it’s worth shopping around.

You can use price comparison websites like Compare the Market, GoCompare and Uswitch.

Most home insurance policies also come with an “excess” – the amount you have to pay towards a claim.

Increasing your excess will see your policy go down, but means you’ll have to fork out more if you have to make a claim.

Do you have a money problem that needs sorting? Get in touch by emailing [email protected].

Plus, you can join our Sun Money Chats and Tips Facebook group to share your tips and stories

The following news has been carefully analyzed, curated, and compiled by Umva Mag from a diverse range of people, sources, and reputable platforms. Our editorial team strives to ensure the accuracy and reliability of the information we provide. By combining insights from multiple perspectives, we aim to offer a well-rounded and comprehensive understanding of the events and stories that shape our world. Umva Mag values transparency, accountability, and journalistic integrity, ensuring that each piece of content is delivered with the utmost professionalism.