When disaster struck in February 2007, with a fire at his home causing over £75,000 of damage to the building and its contents, George was relieved that he had home insurance which he believed would pay for repairing the damage. However, as he had under-insured his contents, his insurance company significantly reduced his pay-out due to the 'condition of average' leaving him £15,000 out of pocket.
The disadvantage of guesswork
George admitted that he always used guesswork when it came to estimating the value of his home contents and when he was on a price comparison site looking for his quotes for his insurance renewal he found that he could save £50 by reducing his amount of contents cover. Thinking that he would still have plenty of cover he thought he had made a good saving.
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George said, "I'd always shopped around for my gas and electric and so when my insurance renewal came through I thought I could save some money by comparing prices online too. I was playing around with the level of cover and saw that if I reduced the level of contents cover I could save quite a bit on my insurance premium. I'd always guessed at my amount of contents anyway and thought that £30,000 would still be plenty. I'd never take that risk again, I've since had a professional valuer come around to my home and was shocked at how much my contents were actually worth. I thought me and my wife's wardrobe (clothes and shoes etc) would be worth about £3,000 but it was actually valued at over £20,000. I've now got my home insurance through N&P [which does cover a lot of things as standard that his last policy didn't] but my advice to everyone would be to be as accurate as possible when it comes to your insurance; you may think you're saving yourself money but it could end up costing you a lot more in the long run".
To find out how you could benefit from financial advice with N&P, talk to an Independent Financial Adviser today.