Stored goods need cover despite reluctant insurers

FURNITURE and household effects need to be insured while they are in storage just as they do when in the house.

Mike and Joanne Corless learnt this the hard way. At the end of 1991 they sold their house and decided to rent before buying again. They put their furniture into storage with Pickfords, and disaster struck on 11 March last year. There was a fire at the warehouse and the couple lost all their possessions.

They had bought pounds 5,000 of fire cover from Pickfords and thought the remaining pounds 2,800 of their loss would be covered under their old household policy. They had asked a broker to arrange for this to be extended to cover their possessions while in storage. But their proposal form did not reach the insurance company, Sun Alliance, until after the fire, and Sun Alliance then said it would have been unlikely to provide cover anyway.

John Hartwell, underwriting manager in the division of Sun Alliance that sells policies through brokers, confirmed that his division of the company was wary about insuring goods in storage.

Norwich Union (NU) said it offered storage cover to existing customers although 'it is not particularly attractive business'. NU will provide cover for fire, explosion, lightning, earthquake and smoke damage. Theft, by enforced entry to the warehouse, is an optional extra and the company will not cover valuables such as gold, silver and documents unless they are held within a safe in the storage depot. Ian Rudd, a personal marketing co-ordinator at NU, said premiums varied depending on the risk, but were based loosely on the policyholder's contents contract.

The British Association of Removers, a trade organisation for removal and storage firms, recommends in its code of practice that members offer insurance to their customers.

Pickfords says that it insists customers have insurance against fire. They are free to arrange this themselves, or they can buy it from Pickfords. The company charges 0.03 per cent, per week, of the value of the goods in store. So pounds 1,000 of goods will cost 30p per week.

Pickfords offers a separate all-risks policy to protect against other disasters and this costs between 10 and 12.5 per cent of the storage fee.

A broker that specialises in arranging policies for removal firms said many other firms offered similar policies to Pickfords, but that terms varied. 'People should check to see what risks are not covered. Some policies exclude jewellery, cash and other valuables.'