As well as being different types of insurance that you can take out to insure your property, possession and valuables, there are also different ways in which you can insure these items too.
Here we look at some of the different basis on which you can insure your items, collectibles, and possessions. And the importance of understanding the type of cover you have in place.
What is replacement value in insurance?
Replacement value refers to insurance which is provided on the basis of how much it would cost to replace your items or property today with an equivalent or identical piece.
What is market value in insurance?
Market value refers to insurance which is provided on the basis of the market value of your items or property. So essentially, how much they would be worth if you were to sell your goods or property.
The importance of considering what type of insurance you take out
The basis on which your items are insured can determine how much is paid out by your insurance if something happens to your possessions. So, if you have valuable items, or a collection of items it will be important to understand the basis on which your items are insured.
You will want to be sure that you have the right type of cover in place and enough cover in place to enable you to replace items if anything were to happen. Whilst also ensuring that you do not lose out financially.
Other basis on which insurance can be arranged include
Agreed value – if you have a collection or valuable items, there are instances whereby insurance can be bought on an agreed value basis. Where you and the insurer agree a fixed amount that your possessions are worth when you take out the policy.
Indemnity based insurance – this refers to insurance where wear and tear is considered, and a deduction made for this when calculating the replacement value or cover that will paid out by the policy
Ensuring you have the right insurance in place to protect your possessions
When it comes to protecting your possessions, high value items and collectibles, it is important to have the right insurance in place.
Have your items valued
Itemise the high value items in your home. And get your items valued. This will be a vital step and help you to understand exactly what your possessions are worth. This is a good starting point to then being able to put the right type and level of insurance in place.
Keep your valuations up to date
You’ll also want to have your items valued on a regular basis and inform your insurer of the valuation so that your insurance is based on the most up to date value. Failing to do so can see you in a position of underinsurance if the values of your items increase and you fail to reflect this in your insurance coverage.
For example, the luxury watch market had seen a surge and rising prices. So, without an up to date valuation it is likely many owners would have been underinsured.
The watch market has since fallen back in the second half of 2022. But this just goes to demonstrate how valuations and markets ebb and flow and change. And the importance of keeping up with these to protect your investments.
Work with an insurance broker
If you do have many high value items, collections, or specialist items in your home, working with an insurance broker such as Anthony Jones can be a good way to get the right insurance for your needs. As insurance experts, an insurance broker will have a good understanding of the different ways that insurance can be arranged. And will be able to work with you to work out what is the most suitable way to insure your possessions.
Chat to Anthony Jones today if you have any questions about getting adequate insurance for the contents in your home. From home insurance to high net worth insurance. Our team of experts can help give you peace of mind that your most valuable possessions are covered. You can call us on 0208 290 9086 or email us at personal@anthonyjones.com.
