Why asset rich individuals run a higher risk of underinsurance

A report at the end of 2015 found that 70-80% of high net worth individuals were underinsured!

Underinsurance

Being underinsured is a common issue when it comes to items that tend to rise in value over the years, such as jewellery, watches, art, wine or classic cars.  With such items, homeowners often reach their insurance figure based on purchase costs or historic valuations that bear little resemblance to a current-day replacement cost.

The financial impact of underinsurance increases in line with the amount and value of your possessions. But there are additional factors to high net worth households that can further accentuate your susceptibility to underinsurance risk.

Changes to values of metals and stones post Brexit

What’s more, precious metals and stones are also vulnerable to fast-changing fluctuations in the global market. For example, the recent increase in gold prices will have accelerated the value of many jewellery pieces.

These factors mean that the replacement costs of such high value items are ever-changing, making regular evaluation from a professional essential.