According to the Abbey, 3.4 million households don’t know whether or not their home contents insurance policy provides cover for the full value of their possessions.
If you are one of these and ever need to claim on your home insurance you run the risk of having your claim reduced or even rejected by your insurance provider.
This also applies to other types of insurance too, so it is well worth taking some time to check how covered you really are.
To check your level of cover you will need to dig out your policy documents and note down the sum insured.
After you have done this, work out how much it would cost you if you have to replace all of your possessions and rebuild your home (if applicable).
Make an inventory of your possessions
The typical family home contains contents worth as much as £40,000.
Go room to room and make a list of everything in your home that you choose to take with you if you were to pack up and move. Don’t forget clothes, jewellery and items in the loft, garage and shed.
This is especially important at the moment when it comes to jewellery because the price of gold is on the up and, for many, personal jewellery is now worth substantially more than it was a year ago.
When you make your list, note down how much it would cost you to replace each item if you had to buy it new.
You will need to get valuable antiques and pieces of jewellery valued by an expert.
Don’t underestimate the value of your contents
Be realistic about how much it would cost you to buy your possessions and remember to individually list particularly expensive items, for instance expensive items of clothing like suits and coats and rare DVDs, records and books.
Don’t forget to update the list
At key times of the year the value of contents in your home will increase. This mainly occurs around Christmas and birthdays when households typically spend hundreds of pounds on gifts which are then stored in the house until the big day. Taking photos will also help you if you ever need to claim.
Regular CD and DVD purchases will also push the value of your contents up – four DVDs a month could easily add over £600 to your total.
Don’t forget to insure engagement rings
The average engagement ring costs around £1,200 so, if you are one of the 1.8 million planning to pop the question in 2008, don’t forget to arrange insurance cover.
According to the Abbey, 73% of engagement rings are not covered by existing home contents insurance policies. Therefore, it is well worth checking whether or not your policy will pay out if anything were to happen to your rings.
Keep your contents list and valuations safe
Once you have completed your inventory and valuations, keep the list somewhere outside of the house in a safe place. This list will be useless to you if it gets destroyed along with the contents of your house. You could swap your list with a family member or friend so that you look after theirs and they look after yours.
Check how much it would cost to rebuild your home
Check to see if the amount of cover you have on your home buildings insurance policy is enough to pay for a full rebuild of your property. This could be different to the market value of the property.
Your mortgage survey may show this cost, or you can pay a surveyor to value the build cost of your property, or use an ‘online ready reckoner to help you. The Association of British Insurers has one on its website - www.abi.org.uk.
Act on any shortfalls
If the total value of your contents is more than the sum insured as stated on your home insurance contents policy, it is time to arrange to buy more cover from your insurer. If you don’t feel you could stretch to pay out any more on your home insurance cover, it may well be worth comparing quotes from other providers to see if you can get more cover for less money.
To start your search for a cheaper quote, click on the link to compare home insurance.
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