Single item limit on home contents insurance

When taking out contents insurance, your policy will usually mention a single item limit.

Understanding what it is will help protect your most valuable possessions and ensure you are properly protected when it comes time to make a claim.

What is a single item limit?

A single item. limit is the maximum amount an insurer will pay out for an individual item when you make a claim. This item could be considerably expensive, such as a piece of high-end jewellery, or an antique. Make sure to bear this in mind when adding up the cost of your contents against your maximum claim limit.

How much is a single item limit?

When you take out contents insurance, most will include a single item limit. This limit is generally between £1,500 and £2,000, but may be more or less depending on your insurance provider.

Is there a maximum limit for valuables?

Yes. Most insurers will set what is known as a 'maximum claim limit' for any valuables. This limit can either be a percentage (e.g., 30% of your total contents value), or a whole amount which, depending on your level of cover, can be as low as £5,000.

For example, if your maximum claim limit for valuables was £5,0000 and you had a Rolex watch worth £10,000 that was stolen from your home, the maximum pay out you would receive is £5,000.

For this reason, if you have individual valuables worth more than the maximum claim limit, you will need to increase your insurance to make sure you're covered. If you don't tell your insurer and at some point need to make a claim, you risk losing out.

Are valuables limits and single item limits the same?

No. Valuables limits and single item limits are different.

Valuables will be defined in your policy as 'high-risk' items (sometimes referred to as 'high-value home items'). You will need to check with your insurer exactly what type of items they consider high-risk, but they are typically deemed those attractive or vulnerable to thieves. This includes: -

• Antiques
• Paintings and other artworks
• Jewellery (including anything made from gold, silver, or other precious metals).
• Watches and clocks
• Musical instruments
• Sports equipment
• Furs and other valuable clothing items
• Stamp, coin, and medal collections
• Television
• Electronic gadgets (laptops, smartphones, gaming consoles etc.)

The valuables limit is the maximum amount for the combined total of these high-risk items.

In general, if the cost of replacing an item exceeds the single item limit shown in your contents insurance policy, it should be considered as a valuable, high-risk item.

Items that exceed the value of your single item limit will need to be listed separately on your policy. This will ensure they are covered for their full value.

How does the valuables limit work?

For example, let's say you have a total contents sum insured value of £50,000. Your valuables maximum claim limit is £15,000, and your single item limit is £2,000 and you: -

1. Make a claim for an item of jewellery worth £1,800 and a designer handbag worth £1,000. So, £2,800 in total.
2. In this scenario, because both items fall below the maximum claim limit for your valuables (£15,000), and are individually less than the single item limit of £2,000, you would be able to claim the total cost.
3. However, if you were also claiming for an antique worth £14,000, the total cost of the valuables you wish to claim for is now £16,800, exceeding your valuables limit of £15,000.
4. The maximum you will receive in your claim, then, will be £15,000 and not the true value of £16,800.

In order to claim for the full cost of high-value items that exceed the claim limit, you will need to declare each item's value separately as being worth more than your single item limit.

Make sure to read your policy's wording carefully to understand how your insurer classifies high-risk items, together with the single item limit.

Why do I need to declare high-value items?

As per the above example, if you fail to declare high-value items to your insurer, you could end up losing money when making a claim.

By telling your insurer about items that are worth more than the single item limit, you can make sure your high-risk items will be covered up to their actual declared value.

In some cases, your valuables may tip the cost of all contents in your home above the replacement cost of the total contents sum insured. In this instance, you might not receive what you're expecting when making a claim.

If you are unsure about the exact value of a rare or valuable item it is a good idea to: -

• Have the item professionally appraised and valued
• Inform your insurance provider
• Upgrade your level of valuables cover (if necessary).

How much cover do I need?

How much you paid for an item or how long ago it was given to you doesn't always reflect its value. If you're not sure how much you should insure an individual item for, it's a good idea to have it professionally valued. Doing so will help ensure that your high-risk valuables are insured for the correct amount.

Remember: values on items can fluctuate depending on market trends and conditions. It's a good idea, then, that for the most expensive items you own, to have these valued every 3 - 5 years.

Some insurers will even have this as a condition of their insurance policy.

Will my premiums go up if I have possessions worth more than the single item limit?

Yes. The higher the value of the items you own, the larger the risk your insurer will think you pose. Consequently, if you have personal possessions that exceed the single item limit, the price of your premiums could go up.

In cases where you haveone or a number of items that are of particularly high value, you may want to consider insuring your valuables using separate, specialist cover.

For items that you regularly take out of the house with you - such as your laptop, smartphone, and watch - your may want to consider personal possessions cover or gadget insurance.

So that you know you're getting the right level of cover, before signing-up for any home insurance deal, it's important to read the policy documents carefully.