“It will never happen to us”

Reluctant as we all are to throw our hard-earned cash down the “insurance drain” we should never forget that a significant number of houses and/or their contents are destroyed each year. Such incidences are highlighted only when a catastrophe of major proportions hits a particular region. Who can forget the disastrous UK floods of 2007 – or have you forgotten these already, having been replaced by the disastrous 2012 floods? Five years on however some residents in the Hull area for example are still picking up the pieces, having been seriously under-insured or, in some cases, not insured at all.

From another angle, in 2011 the London Fire Brigade alone reported 2257 severe fires, these being classified as having rendered a property uninhabitable for any period of time. Whilst in some instances this may be for just a few days, in many others it can be months or even years before the owners can move back in. In the worst cases households are faced with a total loss.

It is therefore prudent to ensure that buildings and contents are adequately insured in the event of a significant loss. The last thing a policyholder needs is to have a claim “averaged” by the insurer, having been deemed retrospectively to be under-insured and to this end it is important to ensure that all contents are accounted for. Typically I have found over the years that clients remember to include their jewellery, paintings and antiques but sometimes inadvertently forget about the carpets, curtains and clothing. Increasingly these can add very significantly to the required level of cover, particularly when features such as home cinemas or multi-room audio systems are involved.

Most policies nowadays offer cover on a “new-for-old” basis: that is, items which are irreparably damaged, destroyed or lost will be replaced with a brand new equivalent. But, on a quid pro quo, the householder is expected to be sufficiently insured to replace their items as if newly purchased. Therefore the fitted carpet that cost £50 per metre thirty years ago is expected to be insured for the modern equivalent price today to ensure a hassle-free settlement.