Cash for gold? Not if you’ve failed to update your insurance policy

RIAS is warning owners of gold jewellery and trinkets to check their insurance policies to see if they are adequately covered.

The cost of gold has risen by a quarter in the past twelve months. According to the insurance provider, 16.6 million UK households have never valued their possessions as the value of gold has soared, meaning that UK consumers are at potential risk of leaving their jewellery

The RIAS ‘Golden Age’ study reveals that there are over 112 million items of gold in homes across Britain, with an average total value of £1,189 per household – meaning that the total value of gold jewellery and other items owned by UK consumers stands at £19.7 billion.

However, almost two thirds (61%) of these gold owners have never had any of their gold items valued. This means that millions of consumers could be left under-insured to the tune of £297 per household, and therefore out of pocket. This equates to an
under-insurance risk of £4.9 billion1 across Great Britain.

As millions of consumers’ home contents insurance policies could be out of date, policyholders may be in danger of receiving substantially less than they should for their ‘high-risk’ items if they suffer theft, loss or damage. For many, this means that should the worst happen, they will not be able to replace their valuables.

The online study highlights over 50s as particularly at risk from this “under-insurance trap”. Over 50s tend to own more gold items than the average UK household (with eight items of gold per household, compared with six items in under 50s households). Furthermore, the value of over 50s’ gold tends to be higher, averaging £1,313 in total per household, compared with their under 50s counterparts, whose gold averages at £1,085.

Janet Connor, Managing Director at RIAS, said:

“Many people over 50 have accumulated a significant number of gold possessions, which may hold both emotional and financial value. With the value of gold significantly increasing over the past 12 months, all consumers would be wise to ensure that all their ‘high-risk’ items are regularly revalued, to avoid any nasty surprises if they did have to make a claim on their household contents insurance.”

“The most an insurer will pay for any high-risk item is the sum the customer has insured it for, as reflected in their policy schedule. By reviewing the value of individual items every two years, and updating policies as necessary, consumers can eliminate the risk of being under or over-insured.”