Underinsurance risk from rising precious metal values

Underinsurance risk from rising precious metal values

There has been a 22% increase over the past two years in the number of jewellery items stolen in home thefts, Churchill Home Insurance has found.

The insurer reveals that jewellery now accounts for over a third of the value of theft from home claims.

Since 2009, the value of jewellery theft claims has risen by 26.7% as the price of gold has risen significantly. The price of gold climbed to a peak value of £1127 per troy ounce in September 2011, compared with £595 in January 2009.

This has also coincided with the rise in popularity of ‘cash for gold’ services, which Churchill Home Insurance believes could make it easier for thieves to sell on stolen jewellery and cash in on rising gold and precious metals values.

However, the insurer says many householders could find themselves underinsured on their jewellery in the event of a burglary if they have not informed their insurer of any increase in value of their jewellery items. Jewellery items that were previously worth less than the maximum value for single valuable items under their home contents insurance policy may now be worth more, but the owner would usually only be covered for the limit stated on their policy.

“We’re currently seeing an increase in both the overall number of jewellery claims and the number of jewellery items stolen within each claim, as the value of gold increases,” said Martin Scott, head of Churchill Home Insurance.

“At the same time we’ve been witnessing a decline in theft claims for electrical goods as these goods decrease in value and thieves target higher-value items instead.

“However, the dramatic increase in the value of gold is also putting consumers at risk of being underinsured and we estimate that 35 – 40% of householders are underinsured on their jewellery items. We urge homeowners to check the current value of their jewellery on a regular basis, and to update their home contents insurance cover accordingly if the value of their gold has increased.”

Scott added: “Ensure any pieces that are worth more than the insurer’s single valuable item limits are listed on the home insurance policy as an additional item. Policyholders should remember to keep receipts or any other proof of purchase on file in case they have to make a claim in the future.”