High-Value Home Insurance: Shoulda put a ring on it (and insured it)



luxury living room

With all the hype surrounding forthcoming Valentines Day, it’s little wonder more than six million people choose to get engaged on this special occasion every year. If you’re one of them, you’ve undoubtedly spent hours planning the setting, working out what to say, and shopping for the perfect ring. But haven’t you forgotten something?

You may assume the engagement ring is covered under your home contents insurance, but chances are, it’s probably not. With a standard home insurance policy, there’s normally a maximum amount you can claim per item called the ‘single item limit’, which is typically between £1,000-£2,500. Whilst you may not have spent over a million on a lavish rock like Channing Tatum did last year [for fiancée Zoë Kravitz], if it cost more than the single item limit and you haven’t declared it to your insurer as a high value item, you’ll be losing out if the ring gets lost, stolen, or damaged. The same goes for any other valuable personal possessions.

Additionally, cover for items away from the home is an ‘add on’ for most home insurance policies, so personal possessions you carry whilst out and about or on holiday may not be included either. And with around 14% of women reportedly losing their engagement ring at some point in their lives, consider if this is a risk you’re willing to take.

Which items are considered high value?

If any of your possessions are worth more than the single item limit mentioned above, they’re considered high value items. This includes items in and around your home such as jewellery, watches, antiques, fine art, collectibles, technology such as laptops and family heirlooms.

You’ll need to declare these separately on your policy to ensure they’re covered, but this is where things can start getting expensive. Each item that you add to a standard home insurance policy comes at a premium and will push up the overall cost. A recent survey found that including expensive goods such as jewellery and heirlooms, could add an extra 25% to the yearly cost of your home insurance premium.

It’s also worth noting that many insurers don't always provide cover for items such as antique furniture, pieces of art or statues under their standard policies. Additionally, these policies have an overall cap on valuables (the total value of your high value items), usually a percentage of your total contents value or a fixed amount.

So, if you have a significant collection of valuable personal possessions, antiques, or art, then you may find you need to look for a specialist home insurance policy instead. More on that later.  

Capturing an individual’s personal inventory

HNW clients will typically have large collections of personal items and are unlikely to have a detailed inventory which captures these, unless they employ the services of an estate manager or personal assistant. Unsurprisingly it is often a huge task just to track how many personal possessions an individual might have, and of course when added up it can be surprising how much collectively they’re worth.

To achieve this outcome the typical start point is for a list to be created of the individual high value items owned and their original price. Often receipts and warranties will be checked to validate cost estimates, although often in the absence of these an online search will be conducted to source the value of equivalent or similar items. Antiques, art, collectibles, or heirlooms are a little trickier, and the help of a specialist dealer is often required to fully assess these and provide an official valuation report.

Once completed the total value of an individual’s home contents can be calculated. Typically captured in the form of a spreadsheet with possessions listed  room by room, including clothing, electricals, furniture, furnishings, and other possessions. Typically, contents cover doesn’t include any permanent fixtures and fittings in your home, so a good way to look at it, is to ensure the list only considers any items that would fall out if you were to turn your house upside down and shake it. Once created such an inventory list will ensure you have a better idea of the levels of valuables and overall contents cover you need.

Do I need a specialist insurance policy?

As previously outlined, if you have a significant amount of high value items, art, or antiques, then a high-net-worth home insurance policy may be for you.

Standard home insurance policies have a maximum total contents limit, typically between £50,000-£100,000, and for buildings insurance this is usually around the £750,000 mark. You may not even consider yourself as high-net-worth, but with the average London house price now at over £500,000, many homeowners could unwittingly fall outside of standard limits. Simply put, a high-net-worth policy is designed for individuals who require a higher level of cover for their assets.

High-net-worth home insurance policies can also be personalised if you need protection against specific risks which are unique to your circumstances, or liability cover against claims for personal injury or property damage. This type of policy offers a more comprehensive cover to meet the specific demands of your lifestyle, but with less restrictive terms. Similarly if you are seeking to insure a property overseas specialist cover will be essential.

What are the benefits of high-net-worth home insurance?

Generally speaking, these policies work on an all-risks basis and the advantage of this is much wider cover. Unlike a standard home insurance policy, which covers only stated perils or risks, a high-net-worth policy covers a broad range of risks such as theft, fire, water, and accidental damage, unless they’re specifically excluded in the policy terms and conditions.

Most high-net-worth policies also provide cover on a worldwide basis, which means your personal possessions are covered wherever you are in the world. This is especially beneficial for people with multiple homes or those who travel a lot for business.

And remember that expensive engagement ring you just bought? High-net-worth policies give you automatic cover for new purchases for up to 60 days or more, so you don’t need to declare them straight away to your insurer.

The peace of mind you get from a high-net-worth home insurance policy? Priceless.