Money: The art of insurance

Terrified of displaying your treasures? You don't need to be.

Phil and Ruth had a dilemma. For years they had been collecting antiques, and they knew that they were grossly under-insured. Their home contents were covered by a standard household policy. Years ago the insurers had required an alarm to be installed and quality locks to be fitted to all exterior doors and windows. The couple had no problems with this, which they regarded as sensible security measures. But they did not like the restrictions on the value of certain items, mainly silver, which could be left out of their safe. And over the years this was increasingly ignored.

They were horrified to discover that after a burglary at the home of friends, the insurance company would not pay out because the teenage son had forgotten to set the alarm before going to bed. It then dawned on Phil and Ruth that despite paying hefty insurance premiums, in the event of their suffering a break-in their own cover was next to useless. Apart from being under-insured, they were also in breach of the terms of their policy because they had more than the permitted value of items in a display cabinet.

Realising that their situation was foolhardy, they decided to take action and approached an insurance broker with a company that had a thorough understanding of the antique and art markets. Instead of being covered by a standard household contents policy, they were now insured under a specialised valuables policy. Much to their surprise, they were able considerably to increase their cover while reducing their premium. Furthermore, there were no restrictions on the value of items that could be left on display - and they were also covered in the event of failing to set the alarm at night, or when leaving home.

Not only were there no annoying restrictions, but, in the event of an item being broken, the company would pay for its restoration and reimburse the difference between its value before and after restoration.

It is not just antique collectors who can benefit from specialised cover. David Needham, of the insurance brokers Needham Jobson, considers that most people who have home contents of pounds 75,000 or more could take advantage.

"This is because at this level their contents will inevitably include art and antiques," he says. Petty criminals find consumer durables such as videos more appealing; consequently the premiums for fine art are lower. The savings can be enormous. David Needham says: "In central London, with a standard policy, pounds 100,000 of cover could cost as much as pounds 1,550; with a specialist policy it could be as low as pounds 200."

Insurance companies are in the business of making money, so how is it that more can be insured for less? The main reason is what the insurance companies call a reduced "moral hazard". This is a polite way of saying that home-owners with a high value of contents are less likely than average to make false claims. They are also more likely to be more security-conscious.

Do not make the mistake of thinking that the lower premiums for specialised cover mean a lower level of service. In fact, it is much higher than with a standard policy.

Whether arranged direct with an insurance company, or through an insurance broker, the client is treated as an individual. Before a quotation is given, the customer will be visited at home and their precise requirements discussed. While this may sound like an unnecessary nicety, it allows for an assessment of an essential element - the insured's lifestyle. A home that has people living in it for most of the time is less likely to be broken into than one which is left unoccupied during the day, at evenings or at weekends. Similarly, a dog or good 24-hour porterage in an apartment block can keep burglars at bay. On the other hand, home-owners who are casual, in the sense that they leave windows open or allow unknown workmen in the house unsupervised, are more likely to suffer losses.

With a specialised policy, the cover of contents is on a system of agreed values. This means that in the majority of cases, any claim for losses is met immediately and in full. Although not a strict policy in all cases, specialist insurers often prefer the contents to be professionally valued in cases where there is a high proportion of antiques.

Since valuers can charge around pounds 600 a day for their services, this does increase the outlay in the first year. However, even with this additional expense, specialist cover can still prove to be less expensive than standard cover from year one.

Insurance companies: Cox Underwriting Services Limited 01608 648000; Nordstern Art Insurance 0171-626-5001. Brokers: Needham Jobson & Co 0171- 839-8340; Realty Insurances 0171-499-7874; HSBC Gibbs 0171-661-2386

Suggested Topics
Arts and Entertainment
Reawakening: can Jon Hamm’s Don Draper find enlightenment in the final ‘Mad Men’?

An enlightening finale for Don Draper

Arts and Entertainment
Serious player: Aussie Guy Sebastian rehearses for the big show in Vienna

Arts and Entertainment
The light stuff: Britt Robertson and George Clooney in ‘Tomorrowland: a World Beyond’
film review
Arts and Entertainment
Reawakening: can Jon Hamm’s Don Draper find enlightenment in the final ‘Mad Men’?
tv reviewNot quite, but it's an enlightening finale for Don Draper spoiler alert
Arts and Entertainment
Breakfast Show’s Nick Grimshaw

Have you tried new the Independent Digital Edition apps?
Arts and Entertainment

ebooksNow available in paperback
Arts and Entertainment

Arts and Entertainment
I am flute: Azeem Ward and his now-famous instrument
Arts and Entertainment
A glass act: Dr Chris van Tulleken (left) and twin Xand get set for their drinking challenge
TV review
Arts and Entertainment
MIA perform at Lovebox 2014 in London Fields, Hackney

Arts and Entertainment
Finnish punk band PKN hope to enter Eurovision 2015 and raise awareness for Down's Syndrome

Arts and Entertainment
William Shakespeare on the cover of John Gerard's The Herball or Generall Historie of Plantes

Arts and Entertainment

Game of Thrones review
Arts and Entertainment
Grayson Perry dedicates his Essex home to Julie

Potter's attempt to create an Essex Taj Mahal was a lovely treat

Arts and Entertainment
A scene from the original Swedish version of the sci-fi TV drama ‘Real Humans’
Arts and Entertainment
Hugh Keays-Byrne plays Immortan Joe, the terrifying gang leader, in the new film
filmActor who played Toecutter returns - but as a different villain in reboot
Arts and Entertainment
Charlize Theron as Imperator Furiosa in Mad Max: Fury Road
Arts and Entertainment
Jessica Hynes in W1A
tvReview: Perhaps the creators of W1A should lay off the copy and paste function spoiler alert
Arts and Entertainment
Power play: Mitsuko Uchida in concert

Arts and Entertainment
Dangerous liaisons: Dominic West, Jake Richard Siciliano, Maura Tierney and Leya Catlett in ‘The Affair’ – a contradictory drama but one which is sure to reel the viewers in
TV review
Arts and Entertainment
Richard Herring, pictured performing at the Edinburgh Fringe Festival two years ago
Arts and Entertainment
Music freak: Max Runham in the funfair band
Arts and Entertainment
film 'I felt under-used by Hollywood'
Latest stories from i100
Have you tried new the Independent Digital Edition apps?

ES Rentals

    Independent Dating

    By clicking 'Search' you
    are agreeing to our
    Terms of Use.

    Is a quiet crusade to reform executive pay bearing fruit?

    Is a quiet crusade to reform executive pay bearing fruit?

    Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
    The King David Hotel gives precious work to Palestinians - unless peace talks are on

    King David Hotel: Palestinians not included

    The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
    More people moving from Australia to New Zealand than in the other direction for first time in 24 years

    End of the Aussie brain drain

    More people moving from Australia to New Zealand than in the other direction for first time in 24 years
    Meditation is touted as a cure for mental instability but can it actually be bad for you?

    Can meditation be bad for you?

    Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
    Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

    Australia's first-ever Eurovision entrant

    Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine
    Letterman's final Late Show: Laughter, but no tears, as David takes his bow after 33 years

    Laughter, but no tears, as Letterman takes his bow after 33 years

    Veteran talkshow host steps down to plaudits from four presidents
    Ivor Novello Awards 2015: Hozier wins with anti-Catholic song 'Take Me To Church' as John Whittingdale leads praise for Black Sabbath

    Hozier's 'blasphemous' song takes Novello award

    Singer joins Ed Sheeran and Clean Bandit in celebration of the best in British and Irish music
    Tequila gold rush: The spirit has gone from a cheap shot to a multi-billion pound product

    Join the tequila gold rush

    The spirit has gone from a cheap shot to a multi-billion pound product
    12 best statement wallpapers

    12 best statement wallpapers

    Make an impact and transform a room with a conversation-starting pattern
    Paul Scholes column: Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?

    Paul Scholes column

    Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?
    Season's finale brings the end of an era for top coaches and players across the continent

    The end of an era across the continent

    It's time to say farewell to Klopp, Clement, Casillas and Xavi this weekend as they move on to pastures new, reports Pete Jenson
    Bin Laden documents released: Papers reveal his obsession with attacking the US and how his failure to keep up with modern jihad led to Isis

    'Focus on killing American people'

    Released Bin Laden documents reveal obsession with attacking United States
    Life hacks: The innovations of volunteers and medical workers are helping Medécins Sans Frontières save people around the world

    Medécins Sans Frontières's life hacks

    The innovations of volunteers and medical workers around the world are helping the charity save people
    Ireland's same-sex marriage vote: As date looms, the Irish ask - how would God vote?

    Same-sex marriage

    As date looms, the Irish ask - how would God vote?
    The underworld is going freelance: Why The Godfather's Mafia model is no longer viable

    The Mafia is going freelance

    Why the underworld model depicted in The Godfather is no longer viable