In a high net worth household policy, if a house worth £2m suffers a fire causing £200,000 in damage, how much will the insurer pay ignoring any excess?

In a high net worth household policy, the insurer typically covers the cost of repairs or replacement of the damaged property, provided the claim falls within the coverage limits of the policy. In this scenario, the house is valued at £2 million, and it has suffered £200,000 in damage due to a fire.

The insurer will assess the amount of damage and will pay for the necessary repairs or replacements up to the sum insured, which in this case is £2 million. Since the cost of damage is £200,000, the insurer is obligated to pay the full amount of the damage, assuming there are no exclusions or specific limitations related to the claim.

Therefore, the insurer will pay £200,000 to cover the repairs from the fire damage, aligning with the principles of indemnity that govern household insurance policies. This reflects the intent of the policy to restore the insured to their financial position prior to the loss without profiting from the insurance.

While other options imply amounts that would not be appropriate given the coverage in place, the focus here is on the straightforward obligation of the insurer to honor the claim for the full extent of the damage, resulting in the payment amount being £200,000.