Fashionistas underinsured?
Wed 24 February 2010
Fashion lovers typically underestimate the value of their clothes by around half, according to new research by financial advisors Defaqto. Many women currently value their clothes at around £3,500, when in reality they are worth closer to £7,000.
The warning is timed to coincide with London Fashion Week (February 19 – 24) in order to impress upon fashion fans the importance of adequate contents insurance to protect their clothes. This is especially true of pieces which are worth over £1,500, which may not be covered in standard insurance policies. Should valuable garments be damaged or destroyed, policy holders may find that they are left with an insufficient payout from which to replace their lost goods.
Mike Powell, insurance analyst for Defaqto, advises: "34 per cent of
home contents policies available state that they have a valuables single item limit of £1,500 or less for items kept in the home. This means that you need to specify any valuable that is worth more than £1,500 to ensure that full cover is given".
To avoid this scenario, Defaqto recommends that policy holders insure their items on a new for old basis and assign a replacement cost for each new item that they purchase. Receipts, valuations and photographs will help in the event of a claim.