Many Britons have miscalculated the value of their homes’ contents and are underinsuring their property by a total of £225 billion, new figures from Axa have suggested.
Research from the insurer has found the average home is insured for just under £29,000, £9,000 less than the £38,000 average value placed on possessions by consumers.
This means many may struggle to replace all their possessions should they be lost through burglary or fire, which could impact any debt management being carried out by the householder due to the added cost of purchasing new items not covered by their insurance policy.
Nick Kidd of Axa explained that it is “absolutely vital” homeowners know what their possessions would cost to replace, adding that people need to resist the temptation to pick “the cheapest option” for home insurance in the credit crunch.
Recent research has revealed many Brits are making insurance cutbacks in the economic downturn, with three-quarters of those questioned by Fairinvestment.co.uk admitting they did not take out travel insurance when going on holiday.
By Tom Musk