By Lana Clements

The turbulent economic climate of the past couple of years has led wealthy homeowners to take the unusual step of evaluating the home insurance policy they have in place.

When they do, they often find their policies cover things they don't need, while not covering the things that matter, according to ACE Private Risk Services.

The problem is that this niche sector of affluent homeowners (known by insurers as 'high net worth' or ' high value' customers) has a policy designed for a mainstream homeowner, rather than opting for a specialist policy.

When choosing your home policy it's important to make sure it's the most suitable for your needs – don't automatically classify yourself as standard if there's a chance it could leave you short in the event of having to claim.

Another insurer, Hiscox, agrees underinsurance for high net worth homeowners is an issue. It found that 60% are underestimating the true value of their possessions, often because they have not considered the value of belongings gathered over the years which may have shot up in price without them realising it.

When people buy their first home, a standard insurance policy is usually sufficient but after a number of years, wealth may have built up that leaves a need for specialist cover. So how do you know if you are on a policy that is right for your circumstances: is an antique collection the criterion for moving on to a high net worth policy, or is it about how much your home is worth?

Trigger points

Unfortunately, there is no set trigger point when you should think about moving onto specialist insurance to cover valuables. Instead, it's simply a case of regularly evaluating what you are covered for and whether it's adequate.

Typical areas where someone with a high net worth may be underinsured are home damage, liability lawsuits and damage or loss of jewellery and fine art. It could be that your home is now worth a considerable amount of money, or you have investment objects that are no longer covered under a standard policy. Standard policies have lower single item limits, usually between £1,000 - £2,000. In comparison, policies for wealthy homeowners won't tend to ask for items below £15,000 to be listed.

Some mainstream providers, such as Direct Line, also offer high net worth policies and may detect you should be on a specialist policy during an application process and try to transfer you. If this happens it's worth consulting an insurance broker to make sure you're getting the best deal for your circumstances, particularly because some high net worth insurance policies are only available through brokers.

A broker can also be useful because they will help you value your possessions as well as providing advice on issues such as security and special or valuable collections because they are experienced in this area.

You can find a broker through the British Insurance Brokers Association (BIBA). Brokers are paid commission for this service which is usually paid for by the insurance company. Any fees should be clearly declared when you are given the cost of your policy, so be sure to check these.