Working out how much your possessions are worth can be difficult when you’re buying home contents insurance.
During the application process, you’ll be asked how much contents cover you need, but where should you start when it comes to deciding on a figure?
In this article, we’ll explain how contents insurance works and how you can value your possessions to ensure they’re fully protected.
What does contents insurance cover?
Contents insurance is a type of home insurance policy designed to cover the possessions you have in your property. This means that if your things are stolen, damaged or destroyed by something that wasn’t your fault (such as a burglary, fire or flooding), your insurer should payout the value of the items (minus any policy excess).
Contents insurance generally covers things that you can take with you when you move, such as clothes, electronics, jewellery, curtains, furniture, carpets and so on, but not usually fixtures and fittings like cabinets or bathroom utilities. These should be covered by you or your landlord’s buildings insurance if you’re renting, or your own buildings policy if you’re a homeowner.
When you buy contents insurance, your insurer will ask you for an estimated value of all of your home contents, which will be the maximum sum they could pay out if all of your things were stolen or damaged. The higher this estimate, the higher your premiums will be.
Of course, this estimate can vary enormously between households, because everyone’s possessions are worth different amounts. This can make it difficult to provide an estimate because most of us own a wide variety of things, many of which we don’t know the value of..
Why is it important to value everything accurately?
According to price comparison site Confused.com, the average value of a home’s contents is £51,646, but you shouldn’t rely on averages or ballpark figures. It’s important to try to consider the value of your particular home’s contents to ensure you don’t end up being over or under-insured.
If you undervalue your items, this simply means that if something happens to your possessions, the payout you’d receive from your provider wouldn’t be enough to replace them. For example, if you have £20,000 worth of contents, but you’re only insured for £10,000, you could be left with £10,000 to find from your savings, or you might have to take out a loan to cover the cost of replacing your things.
In cases of underinsurance, insurers may apply what’s known as an ‘average clause’. What this means is that they can choose to reduce any settlement by the same percentage you’re underinsured by. For example, if you’re underinsured by 50%, your insurer may only agree to pay out 50% of your claim, which in this case would mean the maximum you’d receive is £5,000, even though you were insured for £10,000.
On the other hand, if you overvalue your items, you will be paying unnecessarily high premiums for cover you don’t need.
The Association of British Insurers (ABI) estimates that one in five UK households could be underinsured. Read more about the risks of being underinsured in our article Is your home underinsured?
How can I find out the value of my possessions?
The problem with estimating how much your contents are worth is that some items are simply harder to value than others. If you insure your car, then it has a clear market value. The same goes for something like a laptop. But if you’re insuring antiques, jewellery, one-of-a-kind items or any other possessions where you can’t easily check the value online, working out a figure can be really difficult.
If you’re applying for contents insurance and need to calculate the value of your possessions, consider following these steps:
1. Make a list of your contents
Start by going through each room and making a note of all of your possessions. Be methodical, and don’t forget things in drawers or cupboards. Your home contents may include, for example:
- Kitchen utensils, glasses and jugs, pots and pans, baking trays and so on
- Freestanding kitchen appliances that you own (fridge, freezer, microwave, kettler, toaster, etc.)
- Other freestanding appliances like washers, tumble dryers, etc.
- Freestanding furniture: lamps, sofas and cushions, tables, chairs, and so on
- Curtains and carpets
- Electronics (laptops, tablets, phones, televisions, games consoles, speakers, ebooks, etc.)
- Bedding and towels
- Books, DVDs, games
- Clothes, shoes and accessories
- Jewellery
- Pictures and ornaments
- Any collectibles
- Toys
- Other equipment such as sports gear, musical instruments or exercise equipment
- Toiletries
- Medication
- Cleaning tools and ironing board
- Cosmetic products
- Garden furniture
- Anything else kept outside, such as bikes, barbecues, etc.
2. Calculate the value of as many things as you can
Leaving aside any items that may be difficult to value, go through and estimate the value of everything on your list.
Bear in mind that for insurance, value is the amount it would cost to replace the item, not necessarily how much you paid for it. For example, if you bought something several years ago that has since fallen in price, use its current price. For this reason, it’s worth checking the online retail price of any items that you’ve had for a while or are unsure about.
Some items on your list may not be sold anymore. The expectation in these cases is that you will be able to replace it with an item of equivalent value and utility. For example, if your laptop is a few years old and no longer in production, it would be replaced by a model with similar specifications, not upgraded.
For any particularly high-value items, be aware that most contents policies come with a “single-item limit”, which is a maximum amount a single item is insured for. You can still insure items worth more than this, but they’ll be listed separately on your policy at an additional cost. A typical single-item limit might be between £1,500 and £2,500.
3. Getting items valued
For any items that you are unsure of the value of but believe may be worth a lot it’s usually best to get them professionally valued. This may include items such as ornaments, antiques, jewellery, rare collectibles and so on.
You can get antiques or rare collectibles valued at professional auction houses or antiques dealers. The British Antique Dealers Association website includes a search tool to find an authorised dealer in your area. A local antique shop will usually not be able to give you a formal appraisal, but may be able to point you in the right direction.
Likewise, if you have a piece of artwork that you think may be worth a lot, you can contact a fine art dealer, auctioneer or gallery in order to get a picture of its value. You can look for galleries near you that may be able to provide a valuation with Art Galleries UK’s website.
For jewellery, you can use the National Association of Jewellers or the Jewellery Valuers Association’s websites to find a registered valuer near you.
You should aim to get these items valued every few years and update your policy accordingly, as they can go up and down in price – particularly if they contain precious metals.
4. Add up the final total
Once you have an estimate for everything in your home, simply add up the numbers in a spreadsheet or with a calculator, remembering to set aside a separate total for your high value items.
Remember to update your policy regularly to reflect any major new purchases and avoid becoming underinsured over time.
Where can I get contents insurance?
If you are in need of a home insurance policy, you can use our home insurance comparison tool to compare quotes from over 50 UK providers and find a policy that works for you.
Remember that there’s no reward for staying loyal to your insurer, and you’ll probably find prices creep up every year, even if you haven’t made a claim.
Standalone contents cover can also be purchased from most home insurance providers, for example if you rent your home and only need to insure your things.
Rest Less Money is on Instagram! Check out our account and give us a follow @rest_less_uk_money for all the latest Money News, updated daily.