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

Will Poulter will play the shape-shifting monsterfilm
Arts and Entertainment

books
Arts and Entertainment
Paul Hollywood

'Whether he left is almost immaterial'TV
Arts and Entertainment

game of thrones reviewWarning: spoilers

Arts and Entertainment
The original Star Wars trio of Harrison Ford, Carrie Fisher and Mark Hamill

George Osborne confirms Star Wars 8 will film at Pinewood Studios in time for 4 May

film

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

ebooksNow available in paperback
Arts and Entertainment

ebooks
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?

ES Rentals

    Independent Dating
    and  

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

    Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

    Fishing is on Nigel Farage's mind

    Ukip leader casts a line to the disaffected
    Who is bombing whom in the Middle East? It's amazing they don't all hit each other

    Who is bombing whom in the Middle East?

    Robert Fisk untangles the countries and factions
    China's influence on fashion: At the top of the game both creatively and commercially

    China's influence on fashion

    At the top of the game both creatively and commercially
    Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

    The man known as GOD has a reputation for getting the job done

    Lord O'Donnell's three principles of rule
    Rainbow shades: It's all bright on the night

    Rainbow shades

    It's all bright on the night
    'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

    Bread from heaven

    Dutch survivors thank RAF for World War II drop that saved millions
    Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

    How 'the Axe' helped Labour

    UK will be 'run for the wealthy and powerful' if Tories retain power
    Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

    The price to be paid for challenging the rule of extremists

    A revolution now 'consuming its own children'
    Welcome to the world of Megagames

    Welcome to the world of Megagames

    300 players take part in Watch the Skies! board game in London
    'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

    Charlotte Gainsbourg on 'Nymphomaniac'

    Starring in one of the most explicit films ever
    Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

    Robert Fisk in Abu Dhabi

    The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
    Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

    Vince Cable exclusive interview

    Charging fees for employment tribunals was 'a very bad move'
    Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

    Iwan Rheon is returning to his Welsh roots

    Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
    Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

    It's time for my close-up

    Meet the man who films great whites for a living
    Increasing numbers of homeless people in America keep their mobile phones on the streets

    Homeless people keep mobile phones

    A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before