Avoid the underinsurance trap this Christmas

Don’t get caught in the underinsurance trap this Christmas, warns Halifax Home Insurance. Even if your insurer offers you a free seasonal increase in contents cover you might still end up underinsured.

Halifax, which offers all year round unlimited contents insurance, says that each Christmas many people unwittingly exceed the contents allowance offered in the terms of their insurance policies - as they stash expensive presents away for the big day.

A number of insurers seek to solve the problem of festive underinsurance by increasing their level of contents insurance cover for a nominal period before and after Christmas. But Halifax points out that as soon as this period expires many households immediately become underinsured since the most expensive gifts are often bought for immediate families and remain inside the home.

Vicky Emmott, senior underwriter Halifax Home Insurance comments: "Halifax customers can relax at Christmas as unlike most insurers it offers unlimited contents cover all year round. Although some insurers will increase contents cover over Christmas this still leaves the problem of re-evaluating your contents in the New Year. It's also vital for people without unlimited cover to remember to update their insurer with any changes to their contents value and be aware that some insurers, but not Halifax, will penalise customers who underestimate the value of their belongings.

The insurer also urges anyone planning to hide Christmas presents bought in advance at a friend, relative or neighbour's home to check that their home insurance provider will cover their contents away from the home.

Vicky continued: "It's important to remember that the onus is on you to have the correct insurance in place to cover your gifts from loss or damage – even if they are being stored away from your home.”

Halifax Home Insurance covers items stored away from the owner’s house if they are left in an occupied house or dwelling for up to 90 days. But not every insurer offers this level of cover.

Emmott again: "With high-value items likely to feature on letters to Santa this year a fruitful Christmas could boost the value of your home contents by hundreds or thousands of pounds."