Islands Underinsurance

Why underinsurance happens and why it’s getting worse

Underinsurance creeps up over time. Most people don’t notice until they make a claim and then it’s too late.

Here’s why it’s so common in the Channel Islands:

Prices keep rising

Building materials, labour, and everyday goods cost more here because most are imported. Inflation in Jersey was 2.6% in June 2025, and many building costs have risen even faster.

Home upgrades

A new kitchen, bathroom, or loft conversion can raise your rebuild cost. If you don’t update your cover, you might fall short.

More belongings

Furniture, jewellery, electronics, and art keep adding to your contents value over time.

Forgotten items

Wardrobes, cupboards, garages, and sheds often hide items worth thousands that never get listed.

Family changes

Children’s toys, sports kit, and gadgets quickly raise the cost of replacing everything.

The real risk if you’re underinsured

If you’re underinsured, your insurer can reduce your payout on any claim, not just for major losses. This is because of the average clause. It means your payout is cut by the same percentage you’re underinsured.

Example:

Your contents are worth £60,000
Your policy covers £45,000.
That’s 25% less than you need.
You claim £10,000 for damage.
The insurer pays 75% - £7,500 - and you pay the rest.

Index-linking and Day One cover

Some policies include index-linking or Day One clauses. These are designed to reduce the risk of underinsurance by adjusting sums insured in line with inflation or allowing for growth. But if your base sums are too low, these features will not close the gap.

Why this matters

Even a small gap in your cover can leave you thousands short when you need it most. Underinsurance is one of the biggest causes of complaints in home insurance.

How to check if you’re underinsured

Step 1: Find your rebuild cost
Your cover should match the full cost to rebuild from scratch. That includes demolition, site clearance, and professional fees.
- The best way to be accurate: Get a professional rebuild valuation. A professional valuation gives you a figure based on real local costs. It covers materials, labour, and all the extra expenses in a full rebuild.
- Important: Be careful using online building calculators. Many don’t factor in the Channel Islands or the hidden costs that can arise if the worst happens. A valuation is the safest way to get it right.
Step 2: Value your contents

Work out what it would cost to replace everything you own at today’s prices.

Use our Contents Calculator
Step 3: Compare with your policy

Compare with your policy If your policy covers less than these totals, you’re underinsured. That means you could get a reduced payout if you make a claim.
Step 4: Call Us

If you discover a gap, call us. Our brokers can update your sums insured so it matches your real needs today not the needs you had years ago.

Commonly underinsured items

Some things cost more than you think and you might not have enough cover for them. These are the items we see underinsured most often:

Jewellery, watches, antiques

Their value can rise fast. Many policies limit how much you can claim for one item. If something is worth more, list it separately.
Designer clothes and accessories

Bags, shoes, and coats from luxury brands can cost hundreds or thousands to replace.
Tech

Phones, laptops, tablets, games consoles, and smart devices add up quickly.
Sports Gear

Bikes, golf clubs, surfboards, and gym equipment are expensive to replace, especially for a whole family.
Kitchen kit and appliances

Ovens, hobs, coffee machines, and quality cookware can cost thousands.
Garden items

Tools, BBQs, and outdoor furniture often sit in sheds or garages and get forgotten.

Ways to avoid being underinsured

You can stop underinsurance before it starts. Here’s how:

Review your policy every year: Make it part of your annual routine, just like renewing your car insurance or checking your MOT.
Update after big changes: Tell us if you’ve renovated, added an extension, or bought high-value items.
Value your contents at today’s prices: Use replacement costs, not what you paid years ago.
Check single-item limits: If something is worth more than your policy’s limit, list it separately so it’s fully covered.
Get professional valuations: Jewellery, art, antiques, and watches should be valued every 2–3 years.
Keep proof of value: Keep receipts, valuations, and photos somewhere safe. They speed up claims and help you get the right payout.