Special article for Business News by island based insurance expert SIMON COLQUITT

Our lives today are filled with password-protected folders and data stored securely in the cloud.

We back up devices religiously, in fear of losing stuff.

But when it comes to family heirlooms and personal items, which could be a lot more valuable than we ever imagined, they are often found lying in a dusty, over-crowded attic, drawers or cupboards.

More worrying than that, their true worth is often overlooked when it comes to insurance.

Underinsurance is one of the most common problems encountered within the insurance industry.

It is easy to think that a burglary, fire or flood will never happen to us, and therefore fail to properly ensure that our sums insured are adequate. But it should be considered that in the event of underinsurance, the amount received during a claims process could be affected dramatically.

Standard policies may fall short on both the type and level of cover. They are simply not designed to match our clients’ lifestyles and will not take into account the complexity of assets. This can result in under-insurance or complete gaps in cover.

If you have items in your house that have been passed down through generations, or you’ve bought something that you intend to pass onto your children or it may be you have an appreciation for the finer things in life, it’s worth taking steps to ensure that they’re suitably covered should the worst happen.

The average heirloom is worth £3,000, and one in five people inherit or owns something worth more than £10,000.

Yet, surprisingly, few of us get our treasures valued and listed separately on our insurance policies.

It’s worth bearing in mind that unless an item is named on a policy, the maximum an standard insurance company may pay out for a single item can be as low as £1,500 whilst naming items can increase premiums (believed to be the main reason for people failing to do so), in the long run it is worth doing (buy cheap pay dear as my old boss used to say).

Valuations should also be kept up-to-date, dependent on the type of item the value can reduce and increase quite drastically depending on the current market and demand.

As an example of why a valuation is so important, one of our clients recently inherited a piece of jewellery from their late aunt and assumed the value was only £2,000. 

We recommended a professional valuation which revealed it was in fact worth £15,000.

Obviously this was a lovely surprise for our client but had they not had it valued then they would have been significantly underinsured in the event of claim.

Other things to keep in mind are where to store heirlooms that are not out on display. The common choice is an attic or basement, and yet these can be the worst places for valuables. Attics can get hot and are not temperature controlled, while basements are often cold or damp. Plus, a leaking or burst water tank can cause immeasurable damage.

Should you need to make a claim, excellent service (or lack of it) suddenly becomes apparent. High net worth insurers do genuinely excel in this area with their approach being more understanding, faster and flexible.

At Rossborough, Private Client brokers are experienced in helping people to dot the I’s and cross the t’s . We know what questions to ask and can help to ensure that your treasures, be it jewellery, art, a Persian rug or antique furniture, is sufficiently covered and that its future is secured for future generations.