Contents insurance – types of cover

It’s vital to avoid under insuring the contents of your home. Most policies will ask you to define a ‘sum insured’ – this will be the maximum your insurer will pay out. Under insuring can have drastic consequences because if, for example, the value of the contents of your home is £20,000 and you insure for £10,000 then you will effectively halve the value of your contents. So if you needed a new carpet valued at £2,000, your insurer would only pay £1,000. Be sure to calculate the correct amounts for all of the contents.
The best way to do this is to create a checklist of absolutely everything you have in and around your home. Be sure to include things you have made as well as anything that has been given to you because these things will need to be replaced too. Try to include an approximate date when the items were bought and include any receipts you might have. It’s a fairly lengthy process but well worth the effort to ensure that the contents are insured properly.
Also remember about the limit insurers could place on individual items, as it could be lower than some of your possessions. If this is the case you have three options:
Negotiate for the full value to be included.
Insure the item separately.
Break the item down into components of lower value where possible, for example: a camera can have a lens, the main body and peripheral equipment insured separately.
Follow the advice in our home insurance calculator section to evaluate the cost of the contents of your home. (opens home insurance calculator content in new window)
There are a number of variables that can be considered with contents insurance.