Does your home have an AGA cooker or Belfast sink in the kitchen, a rainforest shower in the wet room or an extensive vinyl collection in the drawing room? Chances are you’re one of the growing numbers of ‘mid-net-worth’ households, according to LV= Home Insurance.
Research by the home insurer has found that the doubling of household income over the last two decades has created a multitude of ‘mass affluent’ homeowners who often don’t know their relative worth. However, over three quarters of these households are not taking out appropriate insurance for their needs.
As part of its study, LV= has identified the key perceived luxury items indicative of a mid-net-worth home– a list including ‘nutrient extractors’, wine fridges and walk-in wardrobes.
Premium items indicative of mid-net-worth households include:
1. Home office (37%)
2. Vinyl collections (18%)
3. Limited edition art (18%)
4. A kids play room (13%)
5. Music delivery system, e.g. Sonos (13%)
6. Under-floor heating (13%)
7. Nutrient extractor, e.g. Nutri-Bullet (12%)
8. Wine fridge (12%)
9. Walk in wardrobe (11%)
10. Luxury paint / wall paper, e.g. Farrow & Ball paint (10%)
11. Range cooker, e.g. AGA or Rangemaster (10%)
Many of these high-end items, however, are potentially at risk of being underinsured – with around half of mass affluent households not identifying themselves as ‘wealthy enough’ and failing to ensure their insurance policies reflect the true value of their possessions.
Of the estimated 3.5 million mass-affluent households, just under a third have re-evaluated their insurance needs in the last five years while just one in eight have taken out specific contents insurance to cover their more high-end purchases. The rest? They rely on standard policies that risk them being short of cover should the worst happen. More worryingly, one in 10 admit to underestimating the total value of their contents to reduce their premium.
An increase in disposable incomes has seen many people fill their homes with luxury goods but neglect to upgrade their contents cover at the same time. It’s important your policy limits reflect what you own. Admittedly, it’s never top of people’s to do lists but it’s worth reviewing your policy on a regular basis to ensure it has kept pace with your lifestyle and your possessions.
If you’d rather have a professional insurance broker do it for you then contact P F Spare Insurance Brokers and we will be pleased to provide you with a quotation based on your mid to high-net-worth home insurance requirements.