Does your house boast a nutrient extractor, a wine fridge and a range cooker in the kitchen? Chances are you’re one of the growing numbers of ‘mid-net-worth’ households, according to LV= Home Insurance.
Research by the home insurer has found that recent increases in household income have created a multitude of ‘mass affluent’ homeowners, who often don’t know their relative worth. However, over three quarters (79%) of these households are not taking out appropriate insurance for their needs.
As part of its study, LV= has identified the key perceived luxury items indicative of a ‘mid-net-worth household’:
- Home office (37%)
- Vinyl collections (18%)
- Limited edition art (18%)
- A kids play room (13%)
- Music delivery system eg Sonos (13%)
- Under-floor heating (13%)
- Nutrient extractor eg NutriBullet (12%)
- Wine fridge (12%)
- Walk in wardrobe (11%)
- Luxury paint/wallpaper eg Farrow & Ball paint (10%)
- Range cooker (10%)
Yet, many of these high-end items are potentially at risk of being underinsured – with around half of ‘mid-net-worth’ not identifying themselves as ‘wealthy enough’ (49%), leading many to being drastically underinsured.
Of the estimated 3.5 million mass-affluent households, just under a third (32%) has re-evaluated their insurance needs in the last five years. While just one in eight (12%) have taken out specific contents insurance to cover their more high-end purchases, the rest rely on standard policies that risk them being short of cover should the worst happen. More worryingly, one in 10 admits to underestimating the total value of their contents to reduce their premium.
Selwyn Fernandes, managing director of LV= Home Insurance, said: “An increase in disposable incomes has seen many people fill their homes with luxury goods. But because they don’t consider themselves ‘mid-net-worth’ it, they haven’t upgraded their contents cover at the same time.
“It’s important your policy limits reflect what you own. Admittedly, it’s never top of people’s to do lists but it’s worth reviewing your policy at least once every three years to ensure its kept pace with your lifestyle and your possessions.”
The research also identified the top 10 items these households are impressed by or aspire to own:
- Grand piano (43%)
- Games room (33%)
- Walk in wardrobe (33%)
- Under-floor heating (30%)
- AGA/range cooker (28%)
- Limited edition art (25%)
- A wet room (24%)
- Pizza oven (24%)
- 3D projector (24%)
- Rainforest shower (23%)