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3 Tips to Prevent Underinsurance for Individuals

Whether it’s your home, contents, car or valuable collections, underestimating the value of what you have can leave you exposed to potentially life changing losses.

Many people are unknowingly underinsured, leading to reduced settlements in the event of a claim, and in some cases leaving you unable to claim at all.

Listed below are some tips to help reduce the risk of underinsurance and ensure you maintain the correct level of cover.

1. Insure your home for its rebuild value, not the market value

83% of UK properties are underinsured1 meaning in the event of a claim, the pay out could be severely reduced and/or your insurer may apply The Average Clause. If your property is not insured for the correct value, then your insurer isn’t getting the premiums that they should be for insuring your building. The Average Clause is the insurers way of making sure you only get what you are paying for, which in the event of a claim, would ultimately leave you needing to pay the shortfall.

To help you further, The ABI (Association of British Insurers) has a free rebuild cost calculator which you can use to check that your buildings insurance amount still covers the rebuild cost.

2. Work out the value of your home contents

Insurers need to know the estimated value of your personal possessions when you take out a home contents policy. It can be easy to overlook something, therefore our advice would be to take a methodical approach, going room by room and making a thorough list of each room’s contents – including things such as curtains, carpets, children’s toys, bedding, and cutlery etc. And don’t forget to include items in your shed, loft or any other outbuildings.

Estimating the value can sometimes be difficult. Your estimates should be based on the cost to replace the item therefore if you are unsure, doing a bit of online research may help. Axa have a useful contents insurance calculator to assist you should you need it. Not only will doing this help protect you in the event of a claim, it will also prevent you overpaying for a level of cover you may not need.

Lastly, most contents policies will have a single item limit therefore make sure you know what this value is, and if you have any possessions you feel are higher than this, speak to your broker who can liaise with the insurer to make sure these can be covered or if not, seek alternative cover for you.

3. Get a professional valuation

Jewellery & watch prices have been rising in recent years, therefore an up-to-date valuation will ensure you are covered in the event of a claim. We recommend a valuation every two to three years however, for some brands of watches this may need to be increased to annually.

It’s important to regularly review your insurance needs and existing cover. Our team of experts are here to help, therefore for further advice or to see how we can help mitigate your risks, call 0121 764 5500 or email


1. RCA (Rebuild Cost Assessment) infographic 2022.