Macbeths Specialist Insurance - Under-Insurance

Making a Value Judgement – The Perils of Under-Insurance

The problem of many insurance policyholders underestimating the value of their contents is viewed as a matter of growing concern. Just recently we arranged valuations for some of our clients and the disparity in the actual values, compared to the values they had estimated for their insurance, was substantial. In fact the difference on average across 5 valuations was 38% with one client’s valuables being valued at 71% more than the figure submitted to their insurer.

What do you need to consider?

Be mindful of increasing  jewellery values
The disparity between the insured value and the real value can often be very high. Statistics below demonstrate the significant increases in gold, silver, diamonds and pearls over the years. Gold, for example, has risen in value by 150% over the past five years and 450% within the past decade, with silver, diamonds and pearls all showing marked increases in value over the same periods.

Items Increased value in
past 10 years
Increased value
in past 5 years
Gold 450% 150%
Silver 300% 150%
Diamonds Doubled in value
Pearls Doubled in value

Source: Pall Mall Art Advisors

Have specialist insurance cover in place

Where insurance exists, the stark reality is that disputed claims for underinsurance can result in the policyholder only receiving a partial claim settlement. Our panel of the UK’s leading high net worth insurers provide products specifically designed for clients with higher than average sums insured for art, antiques and jewellery. Many of these products represent excellent value for money but they will require regular valuations to reflect changes in the markets. Dependent on the level of premium being paid, some insurers will contribute towards the cost of obtaining up to date valuations.
Seeking the right advice
A good starting point is for you to review your current contents insurance policy and consider whether your existing sums insured are adequate. If you have any concerns regarding your own valuation of contents, or two or three years have lapsed since you had a formal valuation, do speak to us as we can offer a range of advice and services to assist you.
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*Information correct as of 1st May 2016

Author: Carl Sharp | January 6th, 2015

Contact the author

Carl Sharp
Get in touch:   Reading: 0118 916 5480   London: 020 7036 8767