Insurance holds an important place in your wealth management strategy. Here’s what you should consider for your insurance in 2015.
Tis the time of New Year’s resolutions. But while insurance may not seem to be the most compelling thing to consider, this is the perfect time to ensure a peaceful frame of mind for the year ahead. It holds an important place in your wealth management strategy.
It’s easy to allow insurance to renew year-on-year, but it also means that people risk becoming complacent over their insurance needs and not being diligent enough in reviewing their cover when it is time for renewal.
When considering insurance needs for the year ahead it makes sense to start with Christmas presents. It may be that Santa has brought something that needs to be insured. It is essential that individuals check whether they are covered by any existing policy or whether the gift may require insurance.
Tied into these concerns should be a review of house contents insurance and, specifically, the sum insured by this cover. The accumulation of further assets over the past year may not have been accounted for in any existing policy so it is always wise to review the levels of cover.
Home improvement is a key area in which expensive changes are often made and not accounted for in the renewal of insurance. Structural additions, such as conservatories, and interior changes, such as fitting a new kitchen, should both be taken into account as they will affect the value of a property and change the requirements of the insurance.
As well as considering any new assets, this review should also take into account the changing value of existing assets. Jewellery is one product which has seen its value increase significantly over the last few years – often far in excess of the increase allowed by index linking that insurers will have applied to the policy. Having assets re-valued to reflect changes in their worth is a vital means of ensuring the accuracy of insurance cover and protecting valuables.
Recognising any changes in possessions, and their value, should therefore form an important part of any insurance evaluation. What also needs to be considered is habits and behaviours, especially in relation to holidays.
Several families travel over the holidays. It is important to check home insurance cover to ascertain the conditions under a policy in which a property can be left unoccupied for an extended period of time. For example many policies stipulate that an unoccupied property is fully covered for up to 30 or 60 days but, after that period, the cover is restricted or, in the worst case, some cover does not apply at all.
While it sounds logical there are too many cases of people not turning off their water which have resulted in an increasing number of claims for damage. The easiest way is simply to turn off the water altogether.
An important part of any insurance review is checking on the limits imposed upon any claim made and ensuring that the limits reflect the value of the assets insured. As well as considering home and possessions left behind while away it is important to consider what is also being packed.
It is also worth investigating the level of cover needed to protect against theft while travelling. Some policies do not cover theft from an unattended vehicle at all but some will cover it to a limit typically as low as £1,000. Heritage is aware of many claims for theft with some over £5,000 and one was in excess of £40,000.
This latter case resulted from a couple leaving their car unattended in a hotel car park while checking in and the car being broken into in that two-minute time period. Luckily, the couple was covered for the full amount of the stolen goods, but the case serves to demonstrate the amount of loss they would have incurred had they not had up-to-date, comprehensive insurance cover.
A review of insurance cover should be an annual routine at the turn-of-the-year. It is essential to recognise that portfolios grow and change and existing cover may no longer adequately reflect the value of the portfolio and any claim may not come close to covering the loss. Similarly, the world itself has changed and many types of cover that were not necessary in the past may well be needed now such as cover for technical equipment such as mobiles and tablets or – indeed – identity theft.
The one certainty is that things change and behaviours and lifestyles are no different. These too will impact on insurance needs.
Professional insurance brokers will help and conduct an audit of current and potential new insurance needs. The New Year is the perfect time to do this; discovering any potential gaps in cover is the ultimate aim of this worthwhile exercise and could end up in saving a significant sum of money ready to spend next Christmas.
If you haven’t considered using a wealth manager before – or if you haven’t reviewed your existing manager to check their competitiveness and suitability try our smart online tool. Or, if you would like to discuss your situation with our straight-talking team, please do get in touch here.