Home Contents Insurance – be totally covered

Many people take out home contents insurance for a set amount of cover and do not consider that they may be under insured. Many insurance policies do come with a fixed sum for the insured amount. A figure of £30,000 or £50,000 is typical in a normal policy.

Whilst this may seem like an adequate amount, you need to stop and assess just how much all of your contents and belongings are actually worth. It is common just to think about the larger and more expensive items such as televisions, washing machines and laptops. What many people do not realise is that it is all the smaller items that can take you over the set sum insured.

It is important to consider all of the contents in your home when working out how much insurance cover you need. Items such as gems, kitchen goods, rugs, kids stuff and clothes are included. You will soon see that all of these items soon add up and if you are under insured you may well be out of pocket.

This may seem a bit far fetched, particularly if you think you are only likely to claim for accidental damage or attempted theft. You will not know what disaster may hit? These would be larger claims can cause damage to many items in your home. Hence, if you were under-insured, and suffered a disaster at home, you might end up paying for these yourself.

Another point to consider is that many insurers set limits on individual items such as jewellery and electrical goods. The limit amount will vary from insurer to insurer, but it is generally in the region of £1,500 for these types of belongings. The proportion means that you might only get £1,000 for a £1,500 item. Leaving you less than flush again.

This is where it pays you to specify any really valuable items on your contents insurance. If you request that the insurer specifies that ring at a value of £2,500, then this is what they would pay out if the ring was lost or stolen.

So how do you work out what an adequate figure is for insurance purposes? Take an inventory of items in each room – that’s the easy way to do it. A rough estimate is all you need if you haven’t got the exact number. Add up all of the figures and this will give you the value that your sum insured should be on your contents policy.

It is worth mentioning that insurance companies will deduct a percentage off any items where wear & tear or depreciation in value applies. The amount that can be paid can be reduced if, for example, there is wear and tear on the items in question, which will reduce your possible claim amount.