Insurance.

Okay, okay. Before you say a word, I know that insurance isn’t exciting and that most people see it as a necessary evil, but bear with me because it’s important.

Make it quick then.
Think of all the homes, possessions, furniture, clothes and cars etc individuals own, they all need insurance cover.

Why?

You tend to find that out when something goes wrong. Let’s say that your wine cellar floods causing damage to the wine casing and labelling. The damage will lead to a loss in value. If you’re not properly insured you have to take the hit. If you are, the insurance company will pay for the difference in value before and after the flood.

Yeh, right. If they decide to pay out. You know what insurers are like.

Well, actually, the problem usually is the laissez faire attitude of the insured. Upgrading an insurance policy is one of the things people put off because it’s dull. As a result, the insurer is unaware of valuable items and refuses to pay out. That leads to frustration, further mistrust of insurance companies and a lack of appropriate insurance for luxury assets.

Consider this. A client of ours, who previously had arranged his own insurances, had a fire in their main home. They claimed for more than £100,000 of damage. But they had only insured themselves for £75,000 and the contents were worth £150,000. The loss adjuster decided that since the client had been under-insured by 50 per cent, they were only entitled to 50 per cent of the claim. They got a cheque for £50,000. There’s an underinsurance clause in most policies.

So, what do I have to do to stop that happening to me?

Get your contents valued properly. Speak to a private client broker, they’ll sort out a valuation.

Sounds expensive.

That’s what people always say about insurance, until they have a claim. But you’d be surprised, for instance, how cheap fine art insurance is. It’s all to do with risk. Burglars are more likely to want jewellery or electrical goods than paintings or antique furniture, which can be traced through the art loss register. If you’d bought a Damien Hirst print for £100,000 at Sotheby’s recently you could have it insured for £250 a year.

Jewellery, on the other hand, is a tricky area. Many people think that their jewellery is covered under their household insurance – but it won’t be if it falls outside the single-article value limit in their policies.
It’s going to be even more boring if I have to have a separate policy for every valuable item in my home. I’ve been collecting for a long time, you know.

Well, you could consider a portfolio policy. That’s a single policy that covers household, motor and travel insurance under a single contract with one renewal date. It can also cover second properties in the UK and overseas, and all of their contents.

Now that really does sound expensive.

Not really. Quite often we’ve put a portfolio policy in place for a high-net-worth client and it has cost them less than all of their other policies put together.

Is there anything else I need to consider.

Well, if you buy a luxury car valued at more than £100,000 you have to go through a private client broker. Direct insurers balk at the value – you need somebody who is comfortable with the fact that a replacement wing mirror can cost £5,000, and knows that the value of a year old luxury car can be higher than its purchase price, especially if there’s a waiting list.

What you’re saying here is that I need help with everything.

The point is that you need up-to-date relevant insurance cover based on current values. If you’re too busy to do that, you can get somebody to do it for you.

For further information and to continue a “conversation with a private client insurance broker” call Mike Nightingale on 07824 530093