A view of roof tops on a street with he backdrop of an orange sunset

Are You Underinsured?

As the saying goes “there is no place like home”. It provides shelter, accommodation and protection for your family and possessions. Furthermore, it is an extension of your personality and status.

Every aspect of your life is reflected in your home. Each room filled with memories, necessities/essentials and precious possessions. Thus it is important that you have adequate insurance cover, should the worst happen.

Insurance cover offers peace of mind, whether you live in a 1 bedroomed flat or mansion on a country estate.

But what if there’s not enough cover in place to rebuild your home or replace your belongings?

Scary fact:

20% of UK households are underinsured. (The Association of British Insurers).

What is underinsurance?

In the event of an insured peril, there is not enough cover to rebuild the property or replace the contents.

The main causes of underinsurance:

• Not supplying accurate information or valuations when obtaining a quote.
• Not checking the policy carefully to ensure that it meets your needs.
• Focussing too much on the cost of the premium rather than on the levels of cover needed.
• Failure to carry out regular assessments and valuations.

Consequences of under insurance:

Discovering you are under insured is not only distressing at such a stressful time but it can be costly as well.

Simple example;

You have £50,000 of contents cover, yet the actual cost of replacing all your belongings is £100,000.

You unfortunately suffer a loss and make a claim for £30,000. Although your claim is for less than the insured amount, insurers apply average.

Average:
Insurers calculate the claim in proportion to the percentage of the under insurance.

Thus because you are 50% under insured they would only pay 50% of the amount claimed (less any excesses).

Which in this example would leave you out of pocket by £15,000 (+ excess)!

Under insurance is usually only discovered when making a claim; at which point it is far too late.

So what is the right level of cover?

Factors to take into consideration when calculating your sums insured:

Buildings

You need to insure the re-instatement value of the property in the event of a total loss and not the market value.

This should include costs associated with;
• The demolition of the existing structure
• Disposal of rubble
• Architects, surveyors, structural engineers charges
• Planning application fees
• Additional costs involved in getting to sites with limited accessibility

Include boundary walls/fences, driveways, outdoor swimming pools and tennis courts.

Is the building listed or of non-standard construction? (Listed or nonstandard properties need specialist tradesman and materials which cost more)

Need help?
You can get general guidance on rebuild costs at https://abi.bcis.co.uk/. Or you may consider having a full structural survey carried out.

Contents

Go through each room. Make a list of items and their approximate replacement cost as new.

It is more than the obvious items such as furniture, white goods and electronic equipment. You have books, CD’s, DVD’s, ornaments etc. There are your personal items such as jewellery and clothing.

Don’t forget the children’s toys. Plus those items stored out of sight in cupboards, the loft, garage and outbuildings.

Also be aware that carpets come under contents.

Review your sums insured:

When adding an extension or loft conversion. Additions to the structure will increase the reinstatement value. Upgrading kitchens or bathrooms with higher quality fittings and “mod cons” can also have an impact

Don’t forget, extensions to a property means more space. More space means more contents to fill it.

When there are changes in your domestic circumstances.
• Moving to a larger property
• A partner or elderly relative moving in
• Having or adopting a child
• Purchasing or receiving a high-value item
• Being left an inheritance

Take into account that antiques, jewellery and works of art by their very nature increase in value. You should also be aware that the death of an artist usually increases the item’s value. So have them appraised every 3 years.

Don’t put your home and belongings at risk.

If you don’t know what something is worth; find out.

Ignorance is not a defence for underinsurance.

A woman using her mobile phone whilst driving.

The Use of Mobile Phones When Driving

The use of a mobile phone or hand – held device whilst driving is illegal. As of 1st March 2017 police are cracking down on the continuous use of mobile phones by drivers. You could have 6 points deducted from your licence including a £200 fine. For new drivers, this could mean having your licence revoked.

When can you use a mobile device whilst driving?

You may only use your device in case of an emergency to call 999 or 112. This is only if it’s unsafe and you are unable to stop.

When can you use a mobile device in your vehicle?

You are not allowed to use your phone at any point when you are driving or even if the engine is running. You may only use a device in your vehicle if you are safely parked and the engine is off with the keys out of the ignition.

Using your device for navigation:

• A cradle is a popular option for hands-free navigation when using your mobile device for commuting.
• When using a device for navigation plug it in before you put the keys in the ignition. Holding/touching a device even if switched off is still a felony. You must not touch it at all once the engine is on.

Using your device for Music:

• Under no circumstances should you use your device to change music. Either use the car radio or prepare a playlist before you enter the vehicle.
• If you must have music from your phone device make sure it is set up before you set off.
• Use of headphones can mean 6 points off your license and a £200 fine.

Uber or cab drivers:

By law, you are not allowed to touch your device when the engine is running. If you work for a cab firm this means you cannot accept work whilst on the move.

Using Bluetooth:

You can use a cellular device via Bluetooth whilst driving. Yet, using the loudspeaker from your phone is not allowed and seen as a danger and distraction.

Be aware:

Death by dangerous driving is no longer the short term of 14 years. You can now serve life imprisonment.

If you ever make a call and the person on the other line is driving – hang up. Similarly, If you are a passenger in a vehicle where the driver is using a cellular device – take it off them. It is a serious danger to both them and the passenger/s of the vehicle.

As an employer, encouraging your staff to use a mobile device whilst driving can result in imprisonment and fines for your company, as well as possible suspension of service.

For more information:

https://www.gov.uk/using-mobile-phones-when-driving-the-law