How much Contents Cover should I buy?
Your contents sum insured should reflect the maximum amount that insurers would have to pay to replace the contents of your home if it was totally destroyed. It is important to get this amount right because any claim (even for a small value) will be reduced by insurers if the value is incorrect.
Unfortunately, many of people get their sums wrong and it is likely that as many as one in five households could be underinsured for Contents.
The best thing to do is to walk through your house, room by room, and add up the value of the possessions in each room. You might be surprised by what you find! Don’t forget things that you have in the cellar, garden shed, garage and attic!
Most Insurance policies have inner limits that put a cap on the total amount that they will pay for high value items, such as works of art, jewellery and some expensive electrical equipment. These can be increased, but you will have to pay a higher premium for this. It is important however that you check this as low limits can reduce premiums, but leave you very exposed.
Most Contents insurance policies are linked to inflation, however you should still keep an eye on these as you will need to increase the cover to reflect any purchases that you make or gifts that you receive. Be aware that special events such as weddings, christening and Christmas and Birthdays might result in a temporary increase in the amount of cover that you need.
The most common extension to Contents polices is for accidental damage. This is where the majority of claims will fall and covers situations like accidentally spilling paint on a carpet or dropping a precious vase. The small cost to increase your contents cover to include accidental damage cover will be well worth the small additional premium charged.
The other area to consider is cover for items that you take out of the home. This is sometimes called all risks or personal possessions cover. This is an extension to the contents cover that, in exchange for an additional premium, will provide cover against accidental loss or damage to personal possessions that you take out of the home, such as clothes, jewellery, cameras and mobile phones.
Cover for personal possessions is normally limited to quite a low level for each item – £500, £100, or £1,500 depending on insurer, so do check the policy limits are adequate. Items which are valued at a higher level that the single article limit can be insured by individually specifying these.
Mobile phones are best insured with the mobile phone company that provides the contract as a home contents policy will only cover the phone, whereas mobile companies are normally able to cover the cost of any calls made by a thief too.