UK Gold Buyers at Risk of Being Underinsured

July 24, 2012 at 04:37


The number of British consumers specifying items of gold on their home insurance policy has more than doubled over the past two years, but homeowners are potentially leaving themselves underinsured due to the rising cost of gold according to analysis of 3.2 million quotes through MoneySupermarket.

The fifth edition of the MoneySupermarket Monitor on home insurance, reveals recordings of specified items of gold on insurance policies have more than doubled since Spring 2010, with an increase of 103pc. However, despite the price of gold rising by an astonishing 43pc over the past two years, the average insured value of gold listed on policies has only risen by 5.8pc, suggesting many households could be considerably underinsured.

Further research by revealed a third of UK adults have bought items of gold recently, with 16pc buying it as an investment. A fifth of those have added the gold onto their home insurance policy as a specified single item.

Julie Fisher, head of home insurance at MoneySupermarket, said: “Many perceive gold as a ‘safe haven’ asset during these challenging economic times, and the cost of gold has increased markedly over the past few years. However, our analysis shows that the average insured value of gold items has not risen in line with the market increases and many people could find their precious items are underinsured. It is therefore important people reassess the value of any gold they own. A gold ring, which may have cost a couple of hundred pounds several years ago, may now be worth four or five times that value, so it is worth seeking a profession evaluation.

“If you underinsure items on your policy, many insurers will invoke a condition of average clause which means you would only receive a percentage of the actual value of an item should you make a claim.

“Additionally, it is essential to add any specified items over £1,500 on your home insurance policy to ensure you don’t take any risks which mean you are not covered for those items in the event of an accident or burglary.”