As our brokers are aware inflation is rising at its fastest rate for over 40 years. This is due to a variety of global events, but in the UK the ramifications of Brexit, closely followed by the Pandemic and then the war in Ukraine has led to serious disruption in global supply chains, shortages in the labour market and the cost of goods and materials rapidly increasing.
It is therefore of no surprise that claims inflation, which for many is a new phenomenon, is likely to have a dramatic effect on index linking over the coming months and possibly years.
Whilst index linking will protect clients from underinsurance in respect of their Building and Contents sums insured, there is often a risk in respect of their Valuables (Fine Art, Jewellery and Collectibles) which are not index linked. We suggest that your clients get up to date valuations in order to prevent disappointment with a settlement in the event of a claim.
To demonstrate this and by way of example, a client who had their Rolex stolen had the watch correctly insured in 2019 for an agreed value of £8,000. When the watch was stolen in 2022 to replace it with a second hand equivalent it cost £22,000. The value had almost tripled in three years!
In order that your clients do not have to deal with a similar situation, we strongly recommend that they consider getting their Fine Art, Jewellery and any collectibles valued.
We have partnered with Gurr Johns Valuers who can offer your clients an excellent service and ensure that underinsurance is illuminated from the list of issues HNW clients face.