When you have worked hard to afford life’s finer things, having theft, fire , flood or other types of damage take those away from you can be hugely distressing. Many high net-worth homeowners have a sentimental attachment to possessions and cannot put a value on this, and therein may lie a problem.

High net-worth homeowners show far too much reticence in assessing their property’s real value and, whilst high net-worth underinsurance has always been an issue, the insurance industry now believes it is worse than ever.

Global supply chain pressures have fuelled raw material price hikes , contributing to worrying inflation and subsequent increases in labour costs. Consequently, the cost of rebuilding a property has risen considerably. Around 587,000 high net-worth homes were thought to be underinsured in 2022, because the rebuild cost had not been correctly assessed.

Underinsurance also relates to contents, with many high net-worth homeowners failing to consider the value of carpets, curtains and furnishings, solely focusing on possessions. Casting an eye around the property, room by room, and assessing the value of absolutely everything, can make this very evident.

Other forces have been at play, too. The best returns on investment have been found via luxury good purchases – Rolex and Swiss watches, gold, diamonds and luxury handbags. The demand for such items has seen hikes in their value. Despite such rises, many homeowners have not had items revalued in the past five or 10 years, leaving such possessions underinsured.

Underinsurance is a huge risk for any homeowner, as it can lead to a vastly reduced claims payout. An insurer could also decline a claim completely.

Find out how we can assist in ensuring you are adequately insured – protecting your home and lifestyle should the worst happen.