At a glance
  • Let your broker know when you want to wear your jewellery and you can opt for a floating limit.
  • You need to only choose your limit out of the safe at any one time.
25th January 2017

Reducing your insurance premium with floating limits

One way a high-value home insurance client can reduce their premium is by talking to their broker about their jewellery and watch wearing habits. Steve Moores, Lark Account Executive advises:

“We often speak to new or prospective clients who have all of their jewellery insured on a worldwide basis, all of the time. They are often unaware that this is inappropriate and gives rise to a higher premium than is necessary.

Rather than limit certain valuables to being insured in the safe only, which is restricting and requires that you let your broker know when you want to wear it, you can opt for a floating limit."

What is a floating limit?

As mentioned above, some people will benefit, in terms of lower premium, by taking a “floating” jewellery & watches (sometimes known as valuables) limit. This works on the assumption that not all of the jewellery is, or can be, worn all the time and that remainder of the jewellery, or some of it, is kept in the home safe.

Choose a floating limit that is sufficient to cover all of the jewellery you'll wear on a special occasion. You don’t need to let us know what and when you take items out of your home safe. As the items can change, and the total figure up to a prescribed limit can vary, it’s known as a “float” or “floating limit”.

A floating valuables limit example:

Let’s assume you have £100,000 of jewellery. Assume that say to day, £25,000  of jewellery and watches is worn. On a special occasion, two additional watches and a necklace might be bought out of the safe. This gives a total figure of £40,000.

You’d therefore opt for a float of £40,000. You would need to keep a minimum of £60,000 of your jewellery in the safe at any one time.

The maximum that insurers would pay, ie for a theft of all your jewellery whilst out one evening, is £40,000.

How does a floating limit benefit me?

Insurers apply a lower rate to the in-safe figure than they do the floating figure, therefore lowering the premium without affecting a client’s lifestyle or cover too much. For example, a worldwide rate of 1.5% on £100,000 of valuables would yield a premium of £1500. With the above float, an example premium would be (40,000x1.5% + 60,000*0.6%) = 600+360 = £960+IPT.

Can I mix a floating limit with jewellery that’s always in the safe?

Yes. You would need to specify which items of jewellery are always kept in the safe.  You would pay a lower premium as above.

Is my safe suitable?

The home safe must be approved by an insurer. It must be of sufficient quality to protect the balance of jewellery left in it. In the above example, the safe would need to have a jewellery rating of £60,000 and a cash rating of £6,000. We can help advise as to what rating your safe should have.

The above is only a guide. Cover and rates vary from insurer to insurer. High floating limits do not always make sense. It’s best to speak to a broker. Call Lark, we can help.

If you’d like to discuss insuring your jewellery in more detail, contact Lesley Hubbard on 020 3846 5266 or email, lesley.hubbard@larkinsurance.co.uk

To get a free, no obligation review of your existing high-value home insurance policy, please contact our team, who will be happy provide further advice or supply you with a quotation.