Agreed, that’s why I have buildings insurance, because a total loss would be catastrophic however vanishingly small the risk (how many people of the tens of millions of property owners in the UK ever suffer a total loss?). But insurance for say £10-15k worth of hi-fi? If the premiums are £250 per annum, and the probability of a total loss over 50 years is 100% (which it wouldn’t be) it’s a wash.
My Hi Fi is a multiple of that £15k, and when all the rest of house contents are reckoned, I could not take the risk of a total loss, however remote. Bear in mind that if you only insure for 50% of house contents and you suffer a total loss, you will, in effect, receive only 25% in the event of a claim.
Not sure where that comes from? If you are under-insured, say only for 50% of gross value, they pay 50% of each item - whether your loss is £15k or £150k.
As for total loss, that thankfully is extremely rare - but best part of 100% of high value items (whether jewellery or hifi) is much more likely a target in burglary, especially a planned burglary as opposed to opportunistic.
The principle is the ‘averaging clause’. If the contents are only insured for half the total value, then in the event of a total loss (or any loss) you will only receive half of the insured value, by reference to the total value of the contents compared to the value which you have insured. Contents worth £100k insured at £50k will give a total insurance payout of £25k for a total loss.
I don’t get that - it seems to be multiplying by 50% twice. It’s not what happened to me: admittedly many years ago now, and the claim was small (equivalent to maybe £2-3k in today’s money): we were underinsured by about 25%, so they coughed up only 75% of the value of the lost item (less the XS).
Insurance is not a bet about what loss you may incur. It is about covering the actual value of your contents, (or your home). If you pay a premium half of what you should have paid, the insurance company will pay you half of the value upon which you have paid a premium. Half x Half = 25%.
Unfortunately, too many find out too late, but it can be devastating. Rule 1, never underinsure for either home or contents.
My understanding, reinforced by personal claim experience, is that if you paid for half the true value, they pay back for only half (meaning half for any item). On what source of information are you basing your 50% of 50% = 25% payout?
Google ‘insurance average clause’. The principle is fundamental to insurance, although perhaps not always enforced in small claims, but if you ever have to press the ‘big button ‘, it could be catastrophic. Never go for a short term cash advantage without all the facts…
Google ‘insurance average clause’. The principle is fundamental to insurance, although perhaps not always enforced in small claims, but if you ever have to press the ‘big button ‘, it could be catastrophic. Never confuse apparent short term saving with
Ok, I Googled “insurance average clause”, and found a “formula” for calculation.
Formula: Claim = Loss Suffered x Insured Value/Total Cost.
So, if insurance vale say 50k but actual total cost = 100k, ans an item worth 20k lost, claim = 20k x 50/100 = 10k. That is what I said, not 25% of value as you said. Where do you get your 50% of 50%?
Sorry, my mistake. My point is that if you under insure, you will not receive the full value of any loss. So if you lose 10k and you have 50k insurance on 100k contents, you will only receive 5k of your loss.
For me, and for most, the consequences of under-insuring in a total loss situation, however unlikely, would be very serious. I sleep easier knowing I’m fully covered.
I fully agree!
Well, my home insurance is now due, and having done some research I can confirm the following rather outstanding different quotes, for essentially the same level of cover (building and contents):-
M&S renewal: £752, Premier unlimited buildings & contents, valuables also unlimited (standard). General XS £50
Hiscox: £1566, unlimited buildings £170k contents, valuables £38k. General XS £500
Aviva: £408, Premium unlimited buildings & contents, valuables £38k, General XS £100.
This year has shown an absolutely huge range of prices, far greater than I have found before.
I think if you buy new , they keep a note of it long past the time when the warranty runs out
I have unlimited cover for buildings and contents including accidental cover for 225 quid. Also covers emergency callout etc
My quotes were also all with accidental damage. Who’s yours with?
Useful info - but this thread doesn’t seem to have much about how good these companies are when it comes to a major claim. Does anyone know of any way to get reliable reviews on that aspect other than word of mouth?
Quotemehappy. The only items they needed to be declared were valuables like watches and jewellery over £1500 (up to a maximum of £10,000).
The renewal is due shortly so I’ll go through it carefully before I click renew.
It’s pretty much impossible to tell what service you are likely to get in the event of a claim. Ensure you have recent photos of your HiFi and any valuables.