Don't just take a wild guess at what your contents are worth - follow our tips on how to calculate the correct sum insured.
When you get a home insurance quote you'll be asked for the total value of your home contents, plus valuables, pedal cycles and personal possessions, as new. We ask you this information so that you're getting the right amount of cover you need, and aren't paying for additional cover that you don't need. While it might be tempting to just randomly guess what the value of contents is, this isn't a wise thing to do, especially if you under value the amount.
What do you think is the total value of your contents? £20,000? £40,000? £60,000? The truth for a lot of people is that unless you sit down and work out what the value of your contents is, room by room, you're unlikely to come up with an accurate figure. Follow our tips below and you'll be on the right track to insuring your contents for the correct valuation.
Estimate the value of your home contents
As already mentioned, the best way to work out your home contents is first to make a list of your main contents on a room-by-room basis and then give them a value.
To help you do this, try starting with a list of all the rooms in your house then consider your items in terms of categories, for example in the kitchen you could consider white goods; appliances; kitchenware; freezer contents; furniture; and soft furnishings. After you've been in each room you should have a final valuation to use in your quote. Why not try out our contents calculator to help you work it out.
Remember, for most contents, cover is new-for-old
Some people make the mistake of valuing their contents based on the second-hand value. For example, you might have a ten-year-old TV and presume that because it has little second-hand value you need only include a small amount for it within the contents sum insured.
However, apart from clothing (which is subject to deduction for wear and tear) all items should be insured for their full replacement cost. So, in this example, an amount should be included in the contents sum insured to replace the TV with a new one, as is this is what you’d expect to get in the event of a claim.
While it might be tempting to under insure your contents, this could cost you in the event of claim. If you insure your contents for up to £25,000 and they really should be insured for up to £50,000, then the lower amount is the most you'd receive in the event of a major claim. For example, if your house had a fire or flood and every piece of content was destroyed, the most you would get is up to £25,000, meaning you wouldn't have enough to replace all of your contents.
Even if you didn't lose all of your contents, if you insure them for less than their full amount, we may make a deduction from your claims amount. For example, if the amount of your contents cover is only 75% of the amount needed to replace all your contents, we would only pay 75% of your claim. Underinsuring your contents might give you a cheaper premium, but could be a false economy in the event of a claim.
Review your sum insured at renewal
Don't fall into the trap of thinking that just because you correctly worked out your sum insured when you took out your policy that it will remain correct year after year.
We may increase the amount of your contents sum insured each year in line with the Retail Price Index or another suitable index if this isn't available. However, this won’t take into account any new items that you buy after you first calculated your sum insured. That’s why if you buy an expensive item or number of items you should ask us to increase the value of your sum insured to avoid being underinsured. Ideally, you should do this when you buy the item(s), and definitely they should be taken into consideration when you renew your policy.