The rising risk of contents underinsurance - how you can help?

In the ever-evolving landscape of personal lines insurance, one pressing issue stands out, according to our latest How We Live¹ report: contents underinsurance. We’ve gathered insights from this research and practical steps to help you navigate this industry challenge for both your existing and new personal lines clients.

The Value Surge

This new data reveals that the average value of household items has surged by 38% over the past five years, reaching more than £58,000.² This increase outpaces the rate of inflation, which was 25% during the same period.³ The data indicates that not only do people own more items, but these items are significantly more valuable.

For instance, the value of personal devices such as laptops, tablets and mobile phones has jumped by 48%, from £3,506 in 2019 to £5,196 today.⁴ Similarly, the value of appliances has risen by 43%, from £3,932 to £5,636, with kitchen appliances specifically seeing a 48% increase from £3,732 to £5,538.

The Bicycle Boom

While the typical UK household's bicycles remain worth £1,000 or less,⁵  the study highlights a growing demand for e-bikes and premium bicycles. This demand has pushed the mean average value of such items up significantly to £4,463.

Expert Insights

Hannah Davidson, Senior Underwriting Manager, Home and Lifestyle (Personal Lines UKGI), emphasises the importance of adequate coverage:

"With UK households now owning items worth almost £60,000 on average, it's important they have adequate cover to protect their cherished possessions. People should pay especially close attention to the ‘sum insured’ shown on a policy, making sure this is sufficient to replace all their possessions."

Jon Santer, MD GI Personal Lines Broker, underscores the crucial role brokers play:

"Brokers play a vital role in helping customers access products that meet their needs, including helping personal lines customers understand the true value of their home and possessions. Our latest How We Live report shows the value of the average UK household’s possessions has increased dramatically in the past five years; this highlights the importance of having deliberate conversations with customers both at new business and renewal to help prevent underinsurance."

The role of the broking community

How can you help tackle this issue? It’s important that you engage your clients in meaningful discussions about the true value of their possessions. This involves:

• Educating clients on the importance of accurate valuations – seeking advice from valuation experts or speaking to their insurer if they're unsure
• Reviewing policies to make sure the sum insured reflects current values, particularly if they've recently purchased new valuables that may not be covered under their current policy
• Highlighting risks associated with underinsurance and the potential financial impact and losses that can occur, if there is an inadequacy of cover

With household items' values rising significantly, please take the opportunity to educate and protect your clients on the rising risk of underinsurance, making sure they have the coverage they need.
 

_{[1] The underlying research was conducted by Censuswide between 8 and 15 November 2024, via a survey of 4,000 nationally representative respondents across the UK (aged 16+). Censuswide abide by and employ members of the Market Research Society, which is based on the ESOMAR principles, and are members of The British Polling Council. [↑]}

_{[2] Note: This adjusted figure was calculated using the sample-wide averages for each category, combined to create an aggregate figure. Please note: This figure does not include the value of vehicles.}

_{[3]  Inflation calculator, Bank of England}

_{[4] Note: this figure accounts for households who reported owning personal devices rather than the entire sample.}

_{[5] . Note: this figure represents the median value of bicycles found in the research [↑]}