There is an issue with under-insuring and we need to keep you up to date.

As you know we are big fans of the Financial Ombudsman Service (FOS), who say it as it is, and in very plain English. 

They are up against what could be construed as gobbledygook terminology on one side and how the guy/girl in the street might understand the bullet points of a policy.

Insurance is not rocket science, but you need to always follow some basic rules. 

Make sure your valuation is up to date and risk profile or any material changes are up to date, and the insurance company knows of them, and try to always read the policy for exclusions, it matters!! 

The FOS has a monthly commentary and recently it homed in on underinsurance. Many people don’t think replacement will be more than they paid years ago. But it will be, and you need to accept that. Interestingly some people have been taken in by advertising suggesting new for old only to be palmed off with the term underinsurance and lower compensation 

In short, if you have items and jewellery worth £50k in your home you should not put the value in at £10k because the Insurer will say you underinsured in the event of a robbery or loss, and only pay out on a pro rata basis. So if you had a claim they – on those basic numbers- would only pay out one fifth.  

Some claims are upheld where the claimant went to the Ombudsman because the Insurer cited underinsurance and they have been upheld because the insurance company had misled the bullet points of the cover. 

But that does not mean underinsurance is the right way to gamble with your property

For sure a lower value will cost a lower premium to pay; but we’re not immune to theft, break-ins or loss and if the valuations are not up to date you might suffer a double whammy of losing what you love and not getting the value back to replace.

That doesn’t mean you should over value either. Just check each year by taking pictures and keeping them on file of all the important items you have and the most recent value and update the insurance company with that information, even sending them the pics. They will confirm back in writing amending your policy accordingly and yes probably add an extra premium but it doesn’t take long and will give you peace of mind.   

Christmas is 7 weeks away and people get lax with security, please this year and always, where you may have been a bit easy going check your alarms work and all window locks are secure when you’re out, and ensure you have a good up to date inventory /value of your property. 

You worked hard to buy it, and you need to work hard to protect it.  

Christmas is the season of good will for sure, but thefts don’t diminish.  

Forewarned is for armed, so please don’t wait to find you are told you are underinsured, when that happens it usually too late.