Why bad maths could cost you a fortune
How much are your possessions worth? Having enough insurance is almost as important as having insurance in the first place. When it comes to applying for a policy, it’s important to provide the right figures, as getting them wrong could have serious consequences. “Guesstimating” the value of your household contents could leave you under insured and out of pocket.
Under-insurance can be a big problem if you make a claim, as your insurance company may not pay out the full cost to replace lost, stolen or damaged items. So, if you only paid for £25,000 of home contents cover, but the total value of your home contents is £50,000, any claim you make, even for a single item included at the correct value, could be scaled-down pro rata.
Whilst the Financial Ombudsman has commented that consumers are “unlikely to be experienced in calculating such costs“, it is in the interests of the policyholder to ensure that the figure they choose to insure for is sufficient.