Paul Addison
The value of the luxury and high-cost items you own isn’t static. Instead, the monetary worth of everything from your house and your watch to your high-end entertainment system, fluctuate over time.
While some items, like electronics and vehicles, often depreciate, other assets could have rising values that leave you underinsured.
Regularly seeking accurate and up-to-date valuations is key to ensuring you are sufficiently covered for theft, loss, or damage. Doing so also gives you peace of mind that the payout you receive will be enough to replace your precious items.
If you haven’t revalued your assets recently, now might be the perfect time. Read on to find out why.
The problem of underinsurance is greater following recent periods of high inflation
The last few years of high inflation and the cost of living crisis might have exacerbated an already prevalent issue.
In a statement released in June 2023, and reported in Insurance Times, specialist insurer Ecclesiastical suggested that 77% of brokers believe underinsurance is a problem, with more than two-thirds (68%) suggesting that the issue is growing and is now worse than ever before.
Despite this, the same group thinks that just 30% of high net worth clients are concerned about the issue.
But should you be?
Some assets that have increased in value over recent years include:
- Buildings
- Jewellery
- Watches
- Art
- Antiques
- Whisky and wine
If you haven’t had these items valued recently, theft, loss, or damage of any of the above could see you face an insurance settlement shortfall. Acting now, on the other hand, will give you peace of mind and could help to smooth the process of any potential future claim.
The housing market fluctuates often so up-to-date revaluations are key whether you’re selling or renovating
Whether you’re looking to sell now, planning to sell in the future, or are considering renovations, understanding how much equity you have could prove vital.
Ideally, you should consider getting your home revalued every six months or so, although the run-up to a new tax year is also a great time to request a valuation.
The property market can change very quickly. Over the last five years, we have seen the coronavirus pandemic and then the mini-Budget of 2022 affect house prices, mortgage deals, and the appetites of buyers and sellers. And the market plays a major role in determining property values.
That means valuations can become quickly out of date.
If you plan to sell, renovate, or buy a new property to add to an existing portfolio, use a revaluation to ensure your plans are feasible. A revaluation can also be useful for ensuring that your plans will add, rather than detract, from your home’s value.
Source: Office for National Statistics (ONS)
This graph shows the average house price across the UK from January 2005 to January 2023 and highlights the generally rising market.
If you haven’t valued your home in a while, consider doing so now.
Other assets like watches and jewellery might have risen in value too
WatchPro recently confirmed that Rolex has increased prices across its portfolio for the second time this year, in response to the rising cost of gold. The increase of 4% in June comes on top of a separate January rise. Steel watch prices have remained unchanged.
The price of gold has increased from around $2,000 at the beginning of 2024 to a high of nearly $2,750 in November, a rise of around 37.5%. The price of a 40mm Rolex Yacht-Master in rose Gold has risen by £1,000 to £26,500, while a 40mm Day-Date in white gold will now set you back an extra £1,400 compared to six months ago.
While these are retail prices for new products, rising gold prices will affect the resale market too and affect the valuation you should apply for insurance purposes. Of course, rising gold prices won’t just affect watches but will also have a bearing on jewellery.
Art isn’t generally affected by stock market movements, with prices fluctuating with demand. Contemporary art in particular, though, has investment potential, at least if art consultancy firm Artelier is to be believed.
The chart shows annualised price appreciation and compares the S&P 500 with contemporary, and all art, for the 25 years from 1995.
If you have artworks that you haven’t had revalued in 5, 10, or even 25 years, now is the time to get them revalued to check that you aren’t underinsured.
Take photos and measurements of your expensive items to help expedite a potential claim
When you come to revaluing your assets, it makes sense to focus on the most expensive items. We often work with experts like Doerr Valuations and Lockton who provide accurate valuations that we can trust.
Keep a close record of your expensive items, the current valuation, and the date of that valuation. Take pictures and include another item for scale or a ruler for smaller items like jewellery. This will help your insurer if you ever have to make a claim.
Keep these records in a safe place where they’ll be protected against fire or flood and make a note of when re-valuations are due. Take fresh photographs at each valuation so your records are always up to date.
Finally, install a safe. Even if your valuables are kept elsewhere, a thief will expect to find a safe and likely keep searching until they do. The safe can be empty, or a decoy, but it could limit property damage in the event of a break-in.
Get in touch
Protecting your valuable possessions can give peace of mind now, while saving you time and money in the future. If you’d like to discuss any aspect of your current protection provision, get in touch.
Contact us online or call 020 7400 4700.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
