With the cost of designer clothes and handbags spiralling into the thousands, Sam Dunn uncovers the best insurance policies to ensure your wardrobe is covered.
Fashion has long exacted a high physical price from its fervent followers.
Whether it’s a set of impossibly high heels, a glorious piece of recherché gravity-defying couture or an oh-so-tight yet drop-dead gorgeous ensemble, designers have long asked legions of willing women to squeeze themselves into impossible shapes for fashion’s sake.
Yet there’s another often-overlooked price to pay too: the irreparable loss of your valuable fashion items to an unfortunate incident such as a burglary, fire or even accidental damage.
Most fashionistas will take great care of their favourite pieces but omit to properly insure their garments and accessories; all clothing – from high street to haute couture – tends to get forgotten about when it comes to insurance.
"Clothes, shoes and bags are all too frequently overlooked for insurance," warns David Black at Defaqto financial analysts.
"Unlike big-ticket items such as jewellery, an expensive hi-fi and art, clothes slip under the insurance radar as we regularly wear them out – and so don’t think of them as part of our home property to be insured."
This can mean that, despite spending thousands of pounds on individual items to make up a wardrobe worth tens of thousands, many dedicated followers of fashion are left horribly exposed to a potential loss.
Among them recently were several hundred victims of a high-profile cat burglar with a penchant for high fashion arrested in San Francisco this year.
The thief and her assistant managed to steal a staggering five lorry-loads worth of top fashion items, including a high-end range of $4,000 (£2,500) coats and $1,400 (£900) dresses.
Even those who do think to insure their fashion wardrobe tend to do it woefully inadequately.
“Watch out with clothes and shoes; insurers tend to apply a ‘wear and tear’ rule over any payout – and it’s applied on a case-by-case basis.”
An insurance industry survey found that nearly half of British women said they estimated the total value of their clothing collections to be less than £1,000 - an extraordinarily low sum given that the average single person's wardrobe is worth well in excess of £2,500.
So whether it’s a pair of the finest from Manolo Blahnik or flattest from Clarks; a clutch from Chloe or satchel from Salisbury; a pleat-front mini from Miu Miu or tank top from TK Maxx, how do you best insure your fashion?
Whether you need a special insurance policy depends on how much of a fashionista you are – and how much you spend on clothes, shoes and bags.
Imagine, among your wardrobe, you typically own a pair of £1,000 studded star slingback Christian Louboutin heels, a £1,100 Miu Miu Matelasse Tote bag and a £1,200 Roberto Cavalli cold shoulder silk gown.
In most cases, a regular simple home insurance policy will cover each item for you in the event of it being stolen in a burglary - without any need for you to specifically declare it on the policy.
This is because most insurers allow you to have any number of individual personal items whose value doesn’t breach a set threshold – usually between £1,500 and £2,000.
In most cases with bags and hats, it’s usually a ‘new for old’ arrangement if stolen or lost but always double-check to be sure, and keep the original receipts.
However, watch out with clothes and shoes; insurers tend to apply a ‘wear and tear’ rule over any payout – and it’s applied on a case-by-case basis.
For example, in most cases, a policy paying out on a stolen five-year old Prada top that originally cost you £800 would be unlikely to offer you any more than £400 back.
When your fashion fix pushes you over a standard home insurance policy limits - if you were the lucky owner of a £4,000 Alexander McQueen dress, say, or £2,200 Chanel handbag - you must then give each item’s details to the insurer.
In cases such as these, their significantly higher value will see you pay a much greater insurance premium – and if you have three or four special items, you could end up paying well over the odds i.e. in excess of £1,000 for cover where it could be worth considering a specialist policy (see below).
A regular home contents policy will usually cover the cost of accidental damage too if you pay for personal possession as an ‘add-on’ to the policy.
Say you suffer a hideous rip to a dress during an unfortunate tumble or an inconsiderate motorist splashes your outfit with a murky roadside mix of water, mud and oil.
In most cases, an ordinary home insurance policy that includes accidental damage to a specifically listed item – adding an extra 15% to the policy usually - will pay for repairs or cleaning.
As long as you’ve given precise details and values of the particular shoes, dress or bag to your insurer in advance, the cost of repair or damage will be reimbursed.
Similarly, theft of designer handbags when in public - an increasingly common cause of much misery - is also included by standard home insurance as long as your bag is one of the listed ‘personal possessions’ on the policy.
“Specialist high net-worth insurance also plugs the usual ‘gaps’ in cover found with standard deals.”
And a word of warning: don’t be fooled by individual handbag insurance promoted by some insurers – in nearly every case, it’s a waste of money as you can easily be covered elsewhere on your home policy.
However, anyone with a fully-fledged passion for fashion – buying and regularly investing in haute couture at prices anywhere from £3,000 upwards for a single dress or pair of shoes – will most likely need a specialist High Net Worth (HNW) home insurance policy instead.
When your beloved frocks, hats, bags and shoes carry a total price tag of tens of thousands of pounds – or more – you’ll need to take special steps to keep them secure.
With specialist HNW insurance such as policies from Hiscox or Chubb, it isn’t just those particularly valuable pieces of high fashion and clothing that you list with the insurer that will be covered: it also typically insures other, separate items of clothing, bags or accessories worth thousands of pounds on top.
So it doesn’t matter if you forget to mention plenty of valuable items alongside your key pieces of couture when buying the policy: they will still be insured.
Specialist high net-worth insurance also plugs the usual ‘gaps’ in cover found with standard deals: for example, where you’d normally have to pay an extra 15% premium for accidental damage cover to your designer clothes either at home or out at a social engagement, a high-value policy usually covers you automatically.
As it’s a specialist market, start by asking your private banker, a specialist broker, or the British Insurance Brokers Association who will be able to guide you to a specialist broker in your area.
By Sam Dunn
