Do your clients know exactly how much their home is worth? How about its contents? Have they ever taken the time to tally them up?
Few of us do. But when it comes to buildings and contents insurance, it can be crucial. Otherwise, your insurance policy may leave you under-insured.
I read an article recently that highlighted this issue, using the plight of one family to demonstrate the problems that can arise from inaccurate valuations.
The family’s home was devastated by a flood, causing over £100,000 of damage. Despite having used the insurer’s recommended valuation calculator to get an accurate value of the property, the homeowner was told she had provided an inaccurate value and was offered less than half of the sum needed to make repairs.
She found herself embroiled in a battle with the insurer to get the money she claimed she was owed. Luckily, the Financial Ombudsman Service stepped in and ordered the insurer to pay the claim in full. But that is not always the case.
One way of insuring your home and contents without using a valuation calculator is to take out a bedroom-rated policy, which has a limit based on the number of bedrooms in the property. These policies are often cheaper and are a more straightforward choice for people who do not have hoards of belongings to insure.
However, the real benefit depends upon the limit of the policy. Choose one with a high limit to ensure your client gets the protection they need.