The hidden cost of underinsurance: Why most homes aren’t protected enough
Two-thirds of UK households are underinsured, leaving families exposed when disaster strikes. The problem isn’t intent, it’s missing proof. Discover how verified ownership can close the gap and protect both customers and insurers.
Jen Wagner
When a fire, flood or burglary hits, insurance is meant to step in. And they do. But for most households, the cover for what they actually own versus what they thought they owned just isn’t there.
According to MoneySuperMarket’s 2024 report, nearly two-thirds of UK households are underinsured. That means if the worst happens, families face losing far more than they ever get back from their policy.
I’ve seen this first-hand. A close friend lost her home in a fire. She spent months rebuilding a list of everything she owned - receipts, photos, spreadsheets, anything she could find. What she realised after doing this was that she was vastly underinsured, so even when her claim was processed, she was left out of pocket. Not because she didn’t have insurance, but because she didn’t have enough cover. I've heard this kind of story many times.
Why underinsurance happens
Most people don’t know what they own, or what it’s worth. It’s easy to do, we see our possessions every day and forget their value.
Furniture, electronics, jewellery, clothing, bikes and toys add up quickly. Yet it’s usually only the “big ticket” items that get noted. We forget about that £1,200 coat we splurged on, the new TV, or the Dyson Airwrap we got for Christmas.
When the time comes to claim, proving ownership is almost impossible without receipts, photos or warranties. And the effort of piecing this together after the worst has already happened makes a stressful situation even harder.
The ownership gap
This is not a problem of intent, it’s a problem of missing data. Ownership has never been easy to capture, which is why underinsurance has remained so persistent.
With digital inventories, every item can be logged with a unique ID and linked to receipts, photos, warranties and verified metadata. Suddenly, households can see an accurate picture of their possessions - and insurers gain a clear, trusted record of what’s at risk.
Why it matters for insurers
- Reduced disputes: policyholders and insurers align on value
- Better underwriting: accurate data means fairer pricing and lower risk exposure
- Improved service: faster claims and transparency drive loyalty
Why it matters for customers
- Confidence: protection that matches reality
- Clarity: visibility of everything they own and its value
- Convenience: no more frantic receipt-hunting in a crisis
Key questions about underinsurance
What percentage of UK households are underinsured?
According to MoneySuperMarket’s 2024 report, around two-thirds of UK households are underinsured, leaving families at risk of financial loss.
Why does underinsurance happen?
Because most people underestimate what they own and cannot prove ownership during a claim.
How can digital inventories help insurers?
Solutions like LAYBL provide verified ownership data, reducing disputes, shortening claim timelines, and improving underwriting accuracy.
How can customers avoid being underinsured?
By creating a digital inventory of their possessions with tools such as LAYBL, and keeping it updated with receipts, photos and metadata.
Own it. Prove it. Protect it.
Underinsurance leaves families exposed and insurers frustrated. Verified ownership closes that gap.
Because when every item has proof, everyone has protection.
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