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Viscount Charles Dupplin
Hiscox Insurance
I was quite depressed recently when I was shown
the latest statistics about how underinsurance
was affecting our clients. This showed that more
than half our clients still have some degree of
underinsurance and about half of these are
really quite badly underinsured. What depressed
me was that these statistics seem completely
unchanged over the last 5 years or so.
Underinsurance is simply where the amount of
insurance one buys is not enough to reinstate
the home and its contents should it be totally
destroyed by for instance a fire.
Hiscox of course has recently faced this year’s
floods in England where in the space of a short
time quite a large number of our clients found
themselves with significant damage to their
homes. Standard insurance
policies have what is called an “average clause”
in them whereby if the client of the standard
insurer is underinsured that insurer only has to
pay out pro rata. That is to say that if a
client is 50% underinsured the standard insurer
will only pay for half the loss. High net worth
policies such as ours (we don’t sell any
standard insurance policies) operate on the
basis of “first loss” that is to say that we
will pay out up to the sums insured and an
underinsured client would only suffer once our
policy limits were exhausted.
It is disappointing to report that a number of
our clients were quite badly underinsured in the
floods and of course wish that they had asked
their insurance broker for assistance |
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in making sure that the sums insured they
selected were correct. We at Hiscox are not at
all worried if people want to deliberately buy
less insurance than the full value of their
home.
In many ways this shows them to be better
clients as they’re running more risk themselves.
We do however want every client to have the
ability to know what their correct sums insured
should be.
If you are unsure at all as to whether you have
bought enough insurance the best first point of
contact is your Insurance Broker. As their
business is to advise on insurance matters for
their clients and to find the correct Insurance
Company they tend to be very skilled in this
area. We also supply our partner brokers with
some helpful tools to assist the broker both for
evaluating the correct level of insurance for
the buildings and for the contents. They can
also advise on what the price might be of buying
a policy with larger limits. An extra £50,000 of
buildings insurance is probably only an extra
£50 a year insurance premium. An extra £25,000
of general contents cover is probably only £75 a
year extra premium.
Ours is a wonderful business insuring cottages
to castles, prints to old master paintings and a
lot of the rich heritage which is Scotland.
There are two fun statistics that have come
across my desk recently apart
from the underinsurance ones. Firstly is that it
is evident that Scottish plumbers are about
twice as well trained as plumbers in Paris. We
can tell this from the number of leaking water
pipes we have to repair. Secondly is to see how
many of our Scottish Insurance Brokers appear in
our ranking for high quality service and for
doing a good job for their clients. Perhaps we
can persuade some of them to train the plumbers
of Paris in future. |
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