Burglaries are on the rise during the holiday season, with new smartphones, jewelry, bicycles and other gifts offering rich profits for thieves.
It is therefore vital that you know whether you will be able to make a claim on your home insurance if you are the victim of a theft.
“It’s important to check the terms and conditions of your home insurance policy to make sure there are any Christmas gifts bought or received will be covered,’ says Alicia Hempstead, insurance expert at price comparison site MoneySuperMarket.
First, some good news: more than 80% of home insurance policies automatically increase your property cover over Christmas (even though they may not use the C-word in their policy text), according to financial information provider Defaqto.
Many policies include what is known as a “seasonal increase” or “special event cover” in the run-up to, during and after a religious festival or celebration such as a wedding or the birth of a child.
This means they usually either increase your ‘sum insured’ by a specific amount – usually anything from £1,000 to £10,000 – or by a percentage of your total contents cover, such as 10% or 20%, says Angela Pillay, underwriter at home expert at Defaqto.
For example, Axa automatically increases customers’ home equipment cover by £7,500 for the 30 days before and 30 days after Christmas. With some insurers it will be less than that: maybe 14 days either way.
For more expensive gifts such as the latest smartphones, laptops and bicycles, whether they are gifts you give or receive, you should check whether the insurer would consider them a ‘high risk’ or ‘valuable’ item.
“This can vary from one insurer to another and can include things other than jewellery, watches or artwork,” says Pili. “Some insurance products list televisions, computers, audio and video entertainment equipment or photography equipment as ‘high risk’ and limit the amount they will pay for each item.”
Data from Defaqto shows that the value limit for any individual high-risk or valuable item can vary widely: from £750 to £15,000.
It says the most common limit, which applies to almost a third of home contents policies, is £2,000. Some policies specify a limit that is a percentage of the total sum insured: usually 5% to 20%.
“If an item exceeds the specified limit, you should contact your insurer and arrange for it to be added as a ‘specified item’ to be covered,” says Pili.
Be aware that your premium may increase if adding expensive gifts to your policy raises the value of your contents above the total amount you’re insured for, says Hempstead.
Quotezone, an insurance comparison site, has a study showing that 70% of people don’t inform their insurance provider when they have expensive presents under the Christmas tree.
He urged people not to post photos of expensive gifts on social media because not only could they attract the attention of thieves, but they could be viewed by your insurer as showing a “lack of care” for the items and potentially cause problems with any claim .
With millions of us hosting at Christmas, that means more people (and perhaps pets) in the house and a potentially greater risk of accidents.
“With lots of excitement and visitors in the home, it can be easy for valuable gifts or belongings to be accidentally damaged,” says Hannah Davidson, senior home underwriter at insurer Aviva.
Accidental damage cover is usually offered as a paid add-on to your home insurance policy. Figures from Compare the Market suggest you can typically expect to pay around £25 to add this cover to a contents insurance policy.