"While it might not be the first thing on your mind, it’s critical that you update the value of your contents regularly. Otherwise, you risk being underinsured and might not get the funds you need in a worst-case scenario like a fire, flood or theft."
- Ceri McMillan - Go Compare
According to a new study, younger residents might be at a much higher risk of being underinsured for their home contents. 68% of under-25s said that they were unfamiliar with the potential pitfalls that could leave their contents underinsured. Only 17% of over-54s said the same, suggesting that younger generations are far more vulnerable to missteps.
The findings come from a recent survey by Go.Compare home insurance, which asked respondents about the issues that could leave them without full protection. It found that a much greater proportion of younger residents lacked awareness of these factors, meaning they might not receive the funds needed to replace their possessions in a worst-case scenario.
Underinsurance occurs when a policy does not provide enough protection to cover everything it needs to. For contents insurance, this can happen when the possessions valuation given on a policy does not match the true value of what someone owns. As a result, a claim would not provide enough funds to replace everything.
According to the research, only 15% of under-25s know how to calculate an accurate valuation of their possessions, leaving the majority of them at risk of underinsurance. In comparison, 34% of over-54s said they know how to give an accurate valuation.
Just 15% of under-25s also said the value of their possessions is up-to-date on a contents insurance policy, compared to 57% of over-54s. This suggests that their valuation has a higher risk of being outdated, another issue which could leave them short when making a claim.
14% of under-25s said they know about single-item limits, meaning many might not have protection for the most high-value items in their homes. 53% of over 55s were aware of this.
The study also revealed that renters might be more likely to fall foul of these potential pitfalls - despite contents insurance being the main policy they need. The survey found that 47% were unaware of all three issues, compared to a fifth of homeowners.
Ceri McMillan, home insurance expert at Go.Compare, says: “It’s shocking to see that so many might not have the coverage they need to keep their possessions safe, particularly younger generations and those living in rented accommodation. 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.
“While it might not be the first thing on your mind, it’s critical that you update the value of your contents regularly. Otherwise, you risk being underinsured and might not get the funds you need in a worst-case scenario like a fire, flood or theft. This results in the cruel double-whammy of losing your possessions and having to absorb the financial cost of replacing them.
“A good way of getting into the habit of updating your insurance is to make sure you revalue your possessions whenever your policy renews. You should also consider updating it after you’ve made any big purchases, such as jewellery or tech, or after big occasions like Christmas and birthdays where you might have an influx of new possessions.
“If you do make any big purchases, be wary of single article limits that might be on your, 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.
“Many people find it difficult to provide an accurate estimate, but there are ways you can get support with this. Our online contents insurance calculator can help you come to a realistic valuation, so consider trying this if you’re struggling.”
