The danger of being under-insured – and you may not even know about it!
Under-insurance is a massive issue for high net worth individuals.
Unfortunately, most of them don’t find out about it until it’s too late… when they need to make a claim.
What is under-insurance?
Under-insurance occurs when a policyholder has inadequate coverage for all their assets. In the event of a claim, where their losses exceed the maximum amount that can be paid out by their policy, they often end up out of pocket.
Let’s explain how and why this happens…
Most high net worth individuals work hard to acquire assets over many years.
As time goes by, they don’t realise the total value of all their accumulations – including:
- Prestige cars – Land Rover, BMW, Maserati etc
- Luxury watches – Rolex, Cartier, Hublot etc
- Diamond jewellery – rings & bracelets
- Electrical gadgets – MacBooks, iPads etc
- Luxury handbags – Prada, Givenchy etc
- Designer clothing & shoes
If you own any of the above, it’s probably unlikely that you called your insurer to let them know about your recent purchase (perhaps with the exception of a new car).
Sadly, this is how most wealthy individuals fall victim to underinsurance.
Shocking everyday examples of under-insurance
If you’re underinsured, it’s not uncommon for something simple like a burst water pipe to cause a major financial headache.
We recently heard a couple of worrying scenarios involving people who are not our clients which perfectly demonstrate the perils of under-insurance…
Grand piano problems: When the owner of a Steinway grand piano reported it had suffered water damage, the replacement value was around £80,000. Sadly, the contents insurance for the 8-bedroom home was only insured for £70,000 – with no specialist provision made for the piano.
Designer wardrobe disaster: In our experience, high net worth homeowners are often surprised to learn the contents of their wardrobe might be worth £50,000 or more. When replacing damaged items like designer handbags and shoes (on a new for old basis) it can quickly leave you exposed to the threat of under-insurance.
Should the worst happen, would you want to end up writing out a cheque for thousands from your own pocket?
Or would you prefer to pay a bit more each month for comprehensive protection?
How we make certain you don’t become a victim
Unfortunately, but not surprisingly, most standard-market insurers and comparison websites don’t shout loudly about the dangers of under-insurance.
We do, because we believe you should know about it before becoming a victim.
Thankfully, there is a way to avoid falling into this trap – put your faith and insurance requirements in our hands.
At Nowell & Richards, we provide worldwide all-risks coverage for all your valuables –comprehensive protection whether you travel with them or keep them at home.
Take out a tailored policy with us and we’ll help you carry out a detailed asset appraisal.
After analysing the wider market, we’ll recommend the best high value contents insurance cover for your lifestyle.
Some insurers even cover ALL new acquisitions and purchases for 90 days as standard to ensure you stay properly insured should you forget to inform us immediately.
And we promise to keep in touch regularly so that any new acquisitions are added on to your policy.
If you’d like to benefit from proactive approach, please get in touch or call 01785 255514 for a free quote.