Unlimited contents insurance policies

Just because your contents are unlimited this doesn’t mean that you’re properly covered. In fact, it doesn’t mean that you are guaranteed anything, it simply promises to pay up to an infinite figure – there is no guaranteed minimum figure. Plus, there are all kinds of inner limits which will apply.

With a traditional policy, you will be insured for a contents figure of, let’s say, £75,000 of contents. If the policy states ‘unlimited’ cover and you have a large claim, you will have to prove the value of your loss, which you would do under any type of policy. But you have no backstop, no figure to work from. The insurer’s loss adjuster may try to reduce the amount paid to you, but the contents sum insured is there as a safety net. There’s no starting figure with an unlimited policy, you start from nil.

In the real world, thankfully, total losses are very rare and the chances are that you’re more likely to suffer a smaller claim, so the unlimited figure doesn’t come in to play for 99% of claims.

This is when the inner limits of a policy are key or as some call it, the ‘small print’. Sure, it’s just a technicality, but a technicality that suddenly becomes critical if you have a claim. This is why you need a broker, someone to guide you through the mass of information and someone who knows which policy will best suit your needs, before a loss occurs.

For your buildings cover, inner limits include:

• Alternative accommodation. How long will the insurer put you and your family up in another home if yours isn’t habitable. Unlimited policies sometimes limit this to 12 months.
• Trace & Access. How much will insurers pay up to, to find a water leak. If the limit is £2,000, is it enough?
• What is the limit for outbuildings? Unlimited policies often exclude anything but sheds and garages altogether.

For your contents cover, inner limits include:

• The cover for jewellery and watches included under contents. Sometimes nil.
• The single article limit per item of contents. Often as low as £5,000.
• The limit for contents covered in the garden, such as garden furniture. Not covered at all under some ‘unlimited’ policies.
• Contents in a garden room or garage. Again, sometimes not covered at all or limited to £1,500.
• Cover away from your home. Often only included under a ‘Personal effects’ section and often set as nil to keep the initial premium down.

Not all policies are the same and there’s no such thing as an ‘unlimited’ policy…which you may only find out in the event of a claim.

If you need more advice on your unlimited policy, then call us on 020 7543 2801.