Content Insurance Claims

Most people are unaware of how a home contents insurance policy actually works. Here’s a thumbnail sketch of the process and what actually happens in the event of a claim being made.

When home contents are insured, and the more valuable items are listed along with the amount to be insured, the insurer accepts whatever items and the amounts you propose for the limit of cover and charges a premium accordingly.

However, this is NOT necessarily the amount that the insurer will actually pay for an item in the event of a loss!

Regardless of what you might claim for a loss, what the insurer will pay is the amount that they determine to be a fair and reasonable value of the item at the time of the loss. So, for example, if you say that item X has a value of £5,000 but the insurer finds that the item can be replaced, or that it has a fair market value, for only £3,000, then they will only pay the £3,000.

In short, the policy is intended to monetarily put you back into the position you were in prior to the loss but not to enrich you i.e. make you better off financially than you were before the loss.

When making a claim, it is up to the policyholder to prepare the claim, and to be able to substantiate the actual existence of the items and the value of items in the claim by submitting documentary evidence of existence and value if required.

Making a photographic record of all the more expensive items e.g, jewelry, antiques, art objects, etc. and retaining purchase receipts are essential to achieving a satisfactory settlement for a contents insurance claim.