Are You Underinsured? The Hidden Risk That Could Cost You Thousands

When it comes to home or contents insurance, underinsurance is one of the most common—and costly—mistakes people make. Many policyholders only discover they're underinsured at the worst possible time: when they make a claim.

At LBH Insurance, we regularly speak with clients who are unaware that their current policy may not reflect the true replacement value of their possessions. With the value of household contents rising sharply in recent years, it's more important than ever to review your cover.

What Are the Consequences of Underinsurance?


Reduced Payouts

If your contents are underinsured, your insurer may apply the "average clause", reducing your payout proportionally.
Example: If your home contents are worth £60,000 but insured for only £30,000, you may only receive 50% of any claim, regardless of the loss amount.

Claim Rejections

In extreme cases—where the declared value is significantly lower than actual value—claims can be denied altogether.

Financial Strain

Without adequate cover, you could be left footing the bill for thousands of pounds in out-of-pocket expenses for repairs or replacements.

What's Driving the Risk?


Surging Item Values

Over the past five years, the average value of household contents has increased by 38%, now exceeding £58,000. Some key trends include:

  • Personal tech (phones, laptops, smart devices): ↑ 48%
  • Kitchen appliances: ↑ 43%
  • Premium bicycles & e-bikes: Now averaging £4,463

Inflation Outpacing Coverage

While inflation has risen around 25%, the actual cost to replace household items has increased even faster—meaning many policies have simply not kept pace.

Lifestyle Changes

Upgrades, renovations, and increased spending on tech, luxury goods, or collectibles are often not reflected in updated insurance policies—especially when renewals are left on auto-pilot.

How to Protect Yourself from Underinsurance
1. Review Your Sum Insured

Make sure it reflects the full replacement cost, not just the resale or market value.

2. Update Your Policy Regularly

Notify your broker or insurer of new purchases, particularly high-value items.

3. Use a Contents Calculator

Go room-by-room, including often overlooked areas like sheds, garages, and attics.

4. Get Professional Valuations

This is particularly important for:

  • Jewellery
  • Antiques
  • Artwork

Overseas or custom items that may cost more to replace in the UK

Why Work with a Broker?

Engaging with an experienced insurance broker means you're not navigating this process alone. A broker can:

  • Have meaningful discussions with you about the true value of your possessions
  • Help you identify gaps in your cover
  • Recommend valuation experts when needed
  • Ensure your insurance is truly tailored to your lifestyle and assets

Speak to the Experts at LBH Insurance

At LBH Insurance, our specialist team will work with you to ensure you're properly protected. We don't just quote a number—we help you understand the real replacement value of your contents and property.

Don't wait until a claim reveals the gap in your cover. Let us help you stay protected and confident.

Call us on 01702 347889 for a no-obligation, competitive quote—and peace of mind that your cover reflects both your risk and your reputation or email enquiries@lbhinsurance.co.uk.