UK Households Ignore Home Insurance

Insurance is something most consumers have to deal with regularly, if you’re a motorist it’s essential and you probably spend a good amount of time ensuring you get a good deal. Likewise there has been news lately regarding how to go about getting the best deal on pet insurance and the necessity of travel insurance. However Halifax has revealed that a great many British consumers have a potentially disastrous gap in insurance cover by having no home contents insurance. According to Halifax’s new figures 7 million people have no home insurance cover at all and 13.6 million only have limited cover.

These figures alone are worrying, however once you consider what the losses involved can be it becomes apparent that lack of home insurance cover is a serious issue. If the worst happened replacing all your belongings is going to be a major headache and no insurance policy is going to be able to replace the irreplaceable such as family heirlooms or photos and mementos. Not having to worry about how you will finance such an endeavour though will go a long way to making it easier to deal with a crisis such as a fire or burglary.

The financial costs of replacing your belongings after an incident such as fire or theft is considerable. Halifax estimates it could cost up to £40,000 to replace belongings, sounds steep but considering the expense of electrical goods and jewellery and additionally clothes and furniture in the event of a fire the money soon adds up. Naturally the thought of not only losing everything but also having to cope financially without an insurance policy to cover you is unthinkable.
As Halifax point out, it’s not just the uninsured that has to worry. Underinsured consumers also stand to suffer significantly and not only because they haven’t cover for all their belongings either. Many insurers have an “average” or “underinsurance” clause that means if you are insured for less than two thirds of your belongings you are only entitled to two thirds of any claim made. For many consumers this would likely come as an unwelcome surprise at the time of a claim. Probably the most common reason for being underinsured is down to not realising the value of your home contents has risen since taking out an insurance policy. We don’t often consider it, but the life changes we go through such as getting married, having children or simply upgrading our belongings when we have some spare cash can raise the value of out belongings past what we are insured for.

So when considering the best home contents policy or whether your current policy is up to scratch what should the prudent consumer do? Halifax advise going for a policy with a large minimum cover or even unlimited cover. That way you don’t have to worry that you’re unknowingly underinsured. Insurance for many people means peace of mind, while it can’t bring back those irreplaceable belongings, or even the replaceable ones that have good memories attached, it can ensure you don’t have to foot the bill for an already traumatic event you couldn’t have foreseen.