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Adequate insurance cover and its importance to protect your high-valued assets

The need to ensure that your high-valued assets are adequately insured

Whether it’s your home, a valuable painting, or a trove of precious jewellery, adequate insurance cover of these treasures is essential, if not it can result in dire financial ramifications in the unfortunate event of loss or damage.

The Peril of Underinsurance

Underinsurance rears its head when the assessed value of an insured item surpasses the cover stipulated by the insurance policy. This discrepancy can stem from various factors, including inaccurate valuation, failure to adjust policy limits (sum insured) over time, or a lack of understanding of shifts in market dynamics.

The repercussions of underinsurance are well-known and grave. Should a claim arise, policyholders who are underinsured might receive only a fraction of their assets’ true value, leaving them to bridge the deficit. This scenario can be especially harsh for affluent individuals whose substantial investments are tied to valuable possessions.

The Significance of Precise Valuation to Establish Adequate Insurance Cover

For insurance brokers and their clientele, precise valuation reigns supreme. This entails not only gauging the current market worth of assets but also factoring in elements like appreciation, depreciation, and market fluctuations. Regular reassessment of policy values is imperative to ensure continued adequate cover.

Clients must weigh the specific risks associated with each possession. For instance, safeguarding a valuable artwork may necessitate specialist cover to account for potential restoration expenses, while a high-end luxury vehicle may require additional safeguards against theft or damage.

Adapting to Market Dynamics

In today’s swiftly changing market landscape, keeping abreast of trends is key for maintaining adequate insurance cover. The worth of assets can fluctuate significantly over time, swayed by economic conditions, consumer preferences, and cultural shifts. Clients must stay attuned to these fluctuations to ensure that policy sum insureds are adjusted accordingly.

Moreover, alterations in lifestyle or circumstances may warrant updates to insurance cover. Whether acquiring new assets, downsizing possessions, or moving house, clients should routinely reassess their insurance policies with their brokers to ensure alignment with evolving needs.

In the realm of insurance, safeguarding high-value assets extends beyond mere policy purchase — it necessitates meticulous assessment, proactive oversight, and continuous vigilance which will ensure that prized possessions are adequately shielded against unforeseen perils.

Contact us today for more information and insurance guidance.

Article by Harrison Law, Cert CII, Head of Commercial & Private Clients, Cox Mahon