Millions of households in the UK are underinsured for their contents insurance, putting them at significant financial risk in the event of loss or damage. Recent research by Go.Compare home insurance revealed that 5.6 million homes do not have adequate cover, and an alarming 9.3 million households lack any contents insurance, leaving their possessions completely unprotected.
The Extent of Underinsurance
The calculations, based on the 2021 census data and ABI statistics, highlight a widespread issue affecting millions of residents. Ceri McMillan, a home insurance expert at Go.Compare, emphasized the potential financial peril facing many households.
“It’s shocking to see that so many might not have the coverage they need to keep their possessions safe. Millions of pounds are at risk of being lost, highlighting that many of us need to take action to make sure our possessions are properly protected,” McMillan said.
The Risks of Underinsurance
Without the right level of cover, households may not receive sufficient funds to repair or replace their belongings in the worst-case scenarios, such as fire, flood, or theft. This situation could leave homeowners facing significant out-of-pocket expenses.
“While it might not be the first thing on your mind, it’s critical that you update the value of your content regularly. Otherwise, you risk being underinsured and might not get the funds you need in a worst-case scenario,” McMillan added.
Tips for Proper Coverage
McMillan advises homeowners to revalue their possessions whenever their policy renews and after making any significant purchases or receiving valuable gifts. This practice can help ensure that insurance coverage remains adequate.
“If you do make any big purchases, be wary of single article limits that may be on your policy, too. For anything you buy that might be worth more than £1,000, double-check that your policy will provide sufficient coverage. You might need to inform your provider about these so that they can be listed individually,” McMillan advised.
Tools to Help
Many people struggle to provide an accurate estimate of their possessions’ value. To assist with this, Go.Compare offers an online contents insurance calculator, which can help homeowners arrive at a realistic valuation for their belongings.
“Consider using our online contents insurance calculator if you’re struggling,” McMillan suggested. “It can help you come to a realistic valuation and ensure you have the necessary coverage.”
Conclusion
The findings underscore the importance of regularly updating home contents insurance to reflect the true value of household possessions. By taking proactive steps, homeowners can protect themselves from significant financial loss in the event of unforeseen circumstances.
