You no doubt feel reassured that your home contents insurance will cover you for anything you own that is stolen, damaged or lost. Providing you have the right type and level of cover, this should usually be the case.
It is important to be aware, however, that when processing claims for valuable items, insurers will normally request some form of proof of ownership.
The precise type of proof that is requested will be subject to the individual terms and conditions of your policy, and the insurer may also set down rules regarding the timestamps of any relevant valuations, and any other specifics they see fit. For items of particularly high value, such as works of art or antiques, it may be the case that the insurer requests sight of a valuation before agreeing to provide cover, and that you may then need to renew that valuation every so often.
As we say, when it comes to proof of ownership, each insurer will have its own individual requirements. Generally, any of the following documents may be requested, so it is wise to make yourself aware of what your own insurer will ask for:
- The original receipt or an emailed copy
- The email receipt for an online purchase
- A recent photograph of the item, sometimes with the owner in shot
- A bank or credit card statement showing the payment for the item
- A certificate, valuation, or appraisal
- A record of the item’s serial number
- A warranty or guarantee document
- An operating manual or packaging
- A police report for any stolen items
Some insurers may stipulate that for any items less than a certain age, a receipt is a must, whilst for older items it could be that a valuation dated within a set time period must accompany a claim. Valuations will normally need to come from a National Association of Jewellers Institute Registered Valuer.
With insurance fraud growing, insurance providers are becoming increasingly stringent regarding proof of ownership for claims.
In the UK, there are around 139,000 fraudulent insurance claims over the course of a year worth almost £1 billion, with the largest proportion of frauds involving bogus or exaggerated claims linked to home insurance.
Each year, the Association of British Insurers (ABI) invests around £200 million to identify fraud. The ABI says that insurance providers are committed to paying all genuine claims as quickly as possible, but they need to strike a balance between investigating potential frauds and ensuring that genuine claimants do not face delays as a result.
Fraudulent claims tend to rise following an economic crisis, which means claim validation measures could become even more stringent following the pandemic of 2020. For policyholders making genuine claims, this is going to result in a tougher stance regarding the provision of evidence of ownership.
According to the ABI, 21% of home insurance claims in 2013/2014 were turned down. Whilst many of these cases were due to wear and tear damage, claims values being lower than the excess, and claimants having bought the wrong type of cover, a proportion were due to the claimant failing to provide evidence of ownership.
What if it isn’t possible to provide proof of ownership?
If you’ve bought an item yourself recently, chances are you’ll still have the receipt. Even if the item was a gift, if it was recent then it is likely that the person who gave it to you will have retained some form of proof of purchase. The problem arises when valuables are older, and receipts have been discarded or lost, or when the item is an heirloom.
There are reported stories of policyholders whose claims were rejected because they were unable to provide the required evidence.
Not every insurer will refuse a claim outright where no proof of ownership is provided by the policyholder. However, if a claim is paid on the basis of no evidence, it will usually be based on the average replacement cost for a similar product.
Some insurers will apply a percentage deduction for wear and tear and loss of value where the proof of ownership is missing. For the policyholder, this means that if the original item was of greater quality and higher than average price, they won’t have enough to replace the item, or will have to make up the shortfall themselves.
What do UK insurance providers suggest as a solution to the difficulty of providing proof of ownership?
Many insurers encourage keeping a home inventory record. Some may provide a form to use; others recommend setting up your own spreadsheet, and a few suggest the use of specialist home inventory software or apps.
Here is the information insurers suggest should be recorded per item:
- Purchase date
- Make and model
- Serial number
- Place of purchase
- Warranty documents
- Receipts or proof of purchase
And the items they suggest are recorded:
- Watches and clocks
- Art and sculpture
- Coins and medals
- Sports equipment
- Musical instruments
- Any other valuables
The value in keeping records of home assets is that you will have all the up to date proof of ownership evidence you need should it be necessary to make an insurance claim. It will also make crime reporting more straightforward. What’s more, by storing the information electronically and backing up to the cloud, you will have a failsafe record.
What are the added benefits of keeping a home contents inventory?
A home contents inventory doesn’t just make it easier to put in an insurance claim. It will also make managing warranties and service plans a whole lot easier. You can also use it to keep track of possessions when moving home, and even to allocate heirlooms for inheritance purposes.
One particularly useful function of an inventory is that it can show you the value of your assets. The ABI says that this is one of the best ways to calculate the value of a home’s contents. This is very helpful, as it will allow you to ensure that you are not over or under-insured, and that any particular items fall within the single item limit.
Research shows that 20% of British households could be under-insured and, whilst over-insurance is obviously less of a risk, it does mean you could be paying more for your cover than necessary. A home inventory could therefore save you money, or reduce your risk.
How do registered databases work?
There are various approved registered databases through which valuables can be registered, although they do not offer all the benefits of a home inventory record. Some of them make a charge for registration, whilst others encourage the purchase of property marking kits.
The databases are approved by the Loss Prevention Certification Board (LPCB) to Loss Prevention Standards. The board, with the support of the police, insurance providers and the government, publishes standards for property marking systems. These standards specify that the marked asset can be traced to the legal owner through a secure database register linked to a marking system, and act as a deterrent by visible marking.
Home contents insurance from Robert Gerrard
If you are looking to renew your home contents cover, or you already have cover through us and would like to check the specific requirements of your existing insurance provider in relation to proof of ownership, you are welcome to get in touch. As always, whether you need a quote or tailored advice, we’re here to help.