Articles - Is standard insurance leaving your high-value assets exposed

By Bob Wilson, Head of Sales and Strategy for Private Clients, WTW 

Standard insurance, often arranged online or through comparison sites, may not always reflect how you live with your assets, how you travel with them and what it could cost to repair or replace them if the unexpected happens. Some standard policies may also have limitations around flexibility, global cover, or discretion when dealing with high-value claims.

Below, we look at where you could face insurance gaps and what to ask to shape cover more closely around the specifics of your higher-value home, cars and belongings.

If your policy only covers the purchase price, that may be the amount your insurer pays out should you need to claim, subject to the policy terms and claims circumstances. More tailored cover, supported by updated valuations and extended replacement provisions where available, may improve the likelihood of replacing your luxury watch in line with current values.

The same review also identified an unmet fire protection requirement, which had left the client without fire cover for several years. We recommended a provider to install the required fire protection, helping the client address the identified gap and improve the suitability of cover for the collection.

In one case, a homeowner we supported believed £3 million of cover was sufficient for their property. But when we carried out an on-site appraisal of the property that considered the high-specification finishes, including the services and materials needed to put the property back into its original condition. This showed the rebuild cost was closer to £3.6 million, or £600,000 of underinsurance.

If £250,000 of your collection remains securely stored in your safe, your policy can be structured to reflect that usage, which could affect the way your premium is calculated, potentially reducing the premium.

Specialist policies can work differently. In some cases, if each car in your collection sits below a certain value, any driver can be covered automatically. Some policies can offer you cover to drive someone else’s car without prior notification, as long as they’re not residing at your home address. That flexibility is valuable if you’re part of a collector network and expect to use classic cars the way many enthusiasts do.

Rising and shifting values can sometimes leave gaps in your cover. Let’s say you have a £100,000 classic car that features in a film or sees a sudden surge in demand. Its value can jump to £130,000 almost overnight. That means if you haven’t adjusted your cover, you may not have enough cover should you need to claim. Some specialist policies may include agreed value or automatic uplift provisions, which can help address sudden market changes.

Specialist policies can also better reflect drops in value. Your £200,000 classic car may be repaired to a flawless standard after an accident, but once original parts are replaced, the car is no longer considered fully original, meaning its market value could fall.

In one case we worked on, a specialist team revalued a classic car after repair and supported a further claims discussion with the insurer. This type of protection is not always well understood, so it can be helpful to ask your broker whether it is relevant to your circumstances.

In one case we managed, a client needed to move collectibles valued at $2 million from the UK to the US. As their private client insurance broker, we helped arrange specialist transport, guards and a lock box, based on the client’s specific requirements.

In another case, a high-profile sports client lost a valuable watch. We supported the claims process discreetly and helped the client obtain a crime reference number, while being mindful of confidentiality considerations.