Direct Line warns against underinsurance
by Richard Kilner
Story link: Direct Line warns against underinsurance
Homeowners may be leaving themselves exposed to underinsurance, according to a new report from Direct Line.
The report indicates that as much as £212.9bn in home contents could be at risk, with over a quarter (26%) of people with contents cover underinsured by as much as £20,000.
Furthermore, one in five people have no home contents insurance at all, leaving an average of £14,000 at risk.
Direct Line’s head of home insurance Andrew Morrell warned that people concerned about belt-tightening should not underestimate the importance of appropriate insurance.
Morrell added that turning a blind eye to the true value of home contents risks putting belongings and finances in jeopardy.
The report also discovered that 39% had not accounted for the increasing value of family heirlooms such as jewellery, furniture and antiques.
Direct Lines valuer Kris Coombes described the level of underinsurance in British homes as worrying, and stated that underinsured homeowners could find themselves in for a shock should they have to make a claim.
In November independent financial research firm Defaqto analysed 299 home contents insurance policies and found that 26% offered less than £500 coverage for cash at home, with 4% providing no coverage whatsoever.