Specialist cover isn't just for connoisseurs

Imagine how terrible it would be if your treasured collection of antiques or modern art, or your flash new stereo, were destroyed or stolen. To make matters worse, it's only when this happens that most people discover they're not covered by their ordinary home contents insurance policy.

Imagine how terrible it would be if your treasured collection of antiques or modern art, or your flash new stereo, were destroyed or stolen. To make matters worse, it's only when this happens that most people discover they're not covered by their ordinary home contents insurance policy.

The limit on any single article included in a basic insurance policy can be surprisingly low. For example, a Bank of Scotland home contents policy sets a maximum of £2,000 per item within total cover of £75,000. Cover under Lloyds TSB's Home Solutions policy is restricted to £50,000, with a £2,000 limit for single pictures, clocks, watches, jewellery, photographic equipment or collections.

This is fine if you don't have really expensive items in your home. But if you do and you get burgled, the maximum you could claim on most policies for all your jewellery, for example, would probably be around £5,000. This would be adequate for most of us, but you only need to have lost one or two quality antique pieces and you could easily be over the limit.

Insurance broker Aon Private Clients specialises in high net worth individuals with expensive homes and valuable art, antiques, cars, horses or jewellery that cannot be adequately covered elsewhere. "As brokers, we can find the best companies for the different items our clients have," explains Jeremy Cary, managing director of Aon Private Clients. "We offer total home contents insurance and specific cover for individual items. We only work with specialist insurers who understand the particular demands of art or antiques or collectables and have a 'settle the claim' culture."

Aon uses specialised insurers such as Hiscox and Chubb Masterpiece. They offer an "agreed value" insurance where individual items are professionally valued and the full amount paid in cash if the item is destroyed or stolen. They also offer depreciation cover so that if, say, a painting is damaged for some reason, not only is the cost of repairing it paid but so is the loss in value due to restoration.

If you have home contents worth at least £100,000, a specialist policy can often work out cheaper in the long run. Charles Dupplin of Hiscox says: "When you consider how much extra cover you're getting, the policies are really much better value for money."

One of the reasons for this is that if you are trying to cover assets worth £75,000 or more under a standard policy, the insurer is likely to increase the premiums anyway because it doesn't want to take that kind of risk. Specialist insurers tend to have a better understanding of the real risks involved with these items. For instance, people with valuable paintings and antiques are much more likely to have better security than those of us who get by with Ikea and parental hand-me-downs.

A reasonably wealthy family in the Home Counties with a house and contents worth around £1m - including some art and antiques, jewellery, expensive rugs and books - would be likely to pay just under £3,000 a year in insurance premiums. Of course, the amount will vary widely from case to case.

"An old master would probably be cheaper to insure than, say, an Yves Klein," explains Mr Dupplin, "because the old master will be pretty robust, whereas the slightest knock to the Yves Klein could cost you a lot to restore."

The "settle the claim" culture that Mr Cary is so keen on is also worth its weight in antique gold when it comes to dealing with your worst nightmare - the loss or theft of your much-loved possessions. Mr Dupplin adds that many home owners only discover the difference when they try to claim on a standard policy.

"They may be insured for £75,000 to £100,000 and assume this will pretty much cover the contents of their home," he says. "But ... many insurers impose limits on single items."

Likewise, insurers will set limits on the maximum to be paid out for damaged pieces of furniture, paintings and ornaments, irrespective of their actual value. With specialist insurance, you have access to valuers who are experts in their fields and can tell you when items have gone up or down in value and should, therefore, be reinsured. So if your Napoleonic chest of drawers gets stolen, you won't just be reimbursed for a similar-sized chest from Courts, you will get the full amount based on the latest valuation.