Financial Services > Home lnsurance > Home Insurance News

Home insurance may be undervalued in British households

Wed, 03 May 2006

Top insurers estimate that a significant proportion of household items may be underinsured, it has recently been announced.

Typical home insurance policies give cover of around £60,000 - £75,000, which allows a buffer of around £15,000 on the average total value of a home's contents . However, assessing the specific total worth of contents at home may be elusive, with Prudential's research revealing that 1 in 10 attics hide 'treasures' or heirlooms worth in excess of £500.

Undervaluing the worth of a household may lead to a reduced payment, or even a non-payment, if the worst should happen. The multitude of cheap home insurance policies on offer mean that many Britons are acting on a false economy, leading to financial problems when the policy does not subsequently pay out.

With approximately 1 million burglaries occurring each year in the UK, and an estimated 2 million homes at risk from flooding, a room by room inventory correctly appraising household value remains the most effective method of avoiding an undervalued household.
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