Rising metal prices push up home contents
Personal insurance
18th March 2010
The value of home contents in Britain is being pushed up by rising metal values, but most households are failing to check their policies to ensure they are covered if their jewellery and other valuables are worth more.
A warning has been issued to homeowners by Giles Insurance Brokers Ltd. to reassess their cover in light of soaring gold prices in recent years. UK insurance policies often have fixed limits relating to the value of items that can be claimed in the event of loss, damage or theft and objects made of precious metals may well have exceeded these as a result of changes in markets.
For example, figures from the World Gold Council show the value of gold increased from $631.17 (£414) per ounce in January 2009 to $1,116.51 (£732.29) for the same month of this year. Commenting on the enduring attraction of the substance, the organisation's chief executive Aram Shishmanian explained: "Gold's broad demand and supply drivers provide a unique balance in the face of economic volatility and uncertainty. This ensures gold retains its intrinsic appeal irrespective of the prevailing market conditions."
Gold is not the only metal that has witnessed sharp increases in prices over the past few years, with platinum rising from just over $1,300 per ounce in September 2009 to just over $1,600 an ounce today, according to data from Metalprices.com, while silver prices have fluctuated over the past six months, but have risen over the last five years.
A recent survey by RIAS found that households in the UK are risking billions of pounds each year by failing to have enough cover under their UK insurance policy. Without taking rising gold and metals prices into account, consumers run the risk of struggling to replace jewellery and other valuable items if they are stolen or damaged and they are forced to claim on their home and contents policies. According to the poll, UK households could be underinsured by a total of £4.9 billion because of rising gold prices, with people over 50 most at risk of not having enough cover.
Commenting on the growing issue of underinsurance Susan Young, Group Personal Lines Director of Giles Insurance, advised homeowners to carefully check the level of cover they have and what provision it makes for individual items and total home contents.
"A growing proportion of people in the UK are seeing the value of their belongings rise but many have never had the contents of their homes valued," he explained. "Moreover, those who have often fail to have this carried out regularly, although prices of precious metals have risen sharply in recent years.
"Insurance policies should be reassessed after any significant purchases, such as engagement rings, antiques or expensive electrical goods, as well as reviewed regularly as the estimated worth of existing possessions changes."
