Are you Under Insured?

Here’s a quick question that will let you know whether you are under insured or not.

Here’s a quick question that will let you know whether you are under insured or not – how much is all the stuff in your home, garage, shed and garden worth?

If you have to sit down and think about it, you are probably under insured because you should know. You would have had to tell your insurance company when you renewed your home contents policy.

The first step to finding out how much to insure your personal possessions and property for is to carry out an audit.

Get a pad and pencil and go round each room in your house systematically noting down each possession and the original cost. Remember:

Anything that is moveable – including fitted carpets goes on your contents policy.
Any personal possessions worth more than £500 as individual items should be listed separately. These are often included on your policy as ‘named items’ because they are high value objects like jewellery, art or antiques.

Collections worth more than £500 don’t count, each item like a DVD is insured separately.

Fixtures and fittings, like the bath, sinks and kitchen units go on your buildings policy

Don’t forget to include the loft, garage, garden and shed.

Take photos of your high value items and collections, so you can prove you own them, and if possible keep receipts for named items on the policy.

If you’re photographing named items, take them in colour and put a ruler beside them to give an idea of size and scale. If there are any special makers or auction house markings, photograph them as well.

When you’ve finished, add up the value of all your personal property and possessions. According to the Association of British Insurers the average home has property worth about £40,000.

Whatever your figure is should be the amount you request as the sum assured under your contents policy from your insurance company.

Also consider new-for-old cover, because you will receive the full replacement cost of the item if you make a claim, but other cover will deduct a cost for fair wear and tear over the period you have owned the item, which may only be half the replacement value.

Your buildings insurance should be indexed linked, so it rises and falls with the house price and building costs. If you have replaced old fixtures and fittings with state-of-the art modern ones, photograph them and tell the insurance company.

For example, if you have fitted gold taps, these obviously have a higher replacement value than nickel or chrome.

Lastly, check your mortgage protection policy and make sure the sum assured matches or exceeds the outstanding mortgage amount. Many people remortgage for a higher amount than the original mortgage but forget to up their mortgage protection cover that leaves a shortfall in the event of their death or being unable to work due to serious illness.

Are you Under Insured?

Here’s a quick question that will let you know whether you are under insured or not.

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