Brits set to lose out in £3,000 under Insurance Gap

One in five households (22%) would be set to lose thousands if they had to make a big claim on their home insurance, according to research by The Co-operative Insurance.

According to the findings, the average ‘Insurance Gap' stands at £3,400 - unsurprising given that most people (66%) rely on guesswork alone when valuing their belongings, leaving many of their valuable items under-insured.

The survey shows that although more than a quarter (27%) of British homeowners own expensive antiques and jewellery, eight in 10 people (80%) admit they have no idea how much these items are worth.

The Co-operative's claims experience also shows that people most commonly fall into the ‘Insurance Gap' - the difference between the value of items and the amount which those items are insured for - when claiming on their insurance for items such as gold jewellery, musical instruments and paintings.

Carl Burton, Home Insurance Manager at The Co-operative Insurance, explained: "Understandably, people forget to update their home insurance policies, and don't tend to regularly evaluate how much their belongings are worth.

"However, items such as antiques and objects made from gold, like watches or rings, tend to increase in value every year, meaning they may well have gone up in value since you last insured them.

"This could be a problem if the worst happens and you have to make a claim, as you will only get back the amount of money you originally insured your items for - meaning you could potentially lose out on hundreds of pounds."

On the other hand, The Co-operative's claims experience also shows that electronic gadgets such as mobile phones, lap tops and flat screen televisions are often ‘over-insured' because these items become quickly outdated.

Most common items which fall through the ‘Insurance Gap', according to The Co-operative Insurance

Under-insured items
 
Gold Jewellery
Coin and stamp collections
Musical Instruments
Paintings
Ornaments

The research also shows that despite most households (82%) saying that they do insure their belongings, half of those surveyed (50%) do not annually update their home insurance, while one in 10 people (10%) have never updated it.

The survey of British homeowners also shows that nearly a third of people (30%) have bought items over the past year totalling £1,556, including flat screen televisions (50%),  new furniture (24%) and jewellery (15%).

It also shows that most people (80%) have never had any of their valuables professionally valued, and 60% do not have insurance for their most expensive items, such as wedding rings or antiques.

Tips to ensure your belongings are covered

‘Under-insured' belongings are commonly antiques as well as gold items, which grow in value year on year. It's always worth having these items reviewed professionally by an antiques expert, who can tell you their current value

Think about updating your insurance after life events and occasions, for example, a wedding, Christmas or an anniversary where you may have received expensive gifts

When you take out or renew home insurance, walk through all the rooms in your house adding up the rough value of all the items you own to give you a more accurate assessment

Some comparison sites provide home insurance calculators to help you assess the value of items in your home