How much home contents insurance do you really need?

Are you sure you're insured?

Accurately estimating the value of our homes and contents is something we should do regularly, as it can be easy to overlook or underestimate certain items. Miscalculating the rebuild cost or total value of your contents could leave you vulnerable to being underinsured.

What does being underinsured mean?

To be ‘underinsured’ means that the amount you’re covered for is less than the cost of rebuilding, replacing, or repairing. For example, if you had a fire at home and the value of your contents is stated at £150,000, but the actual cost to replace your contents is £225,000, then you’re underinsured, and the reality is you will not be paid the full value of your claim, leaving you to pick up the shortfall.

Why it's crucial to choose the right Home Insurance

When choosing home insurance, it's crucial to look beyond the most convenient or cost-effective options and truly consider the value of your possessions. Alastair Meiklejon from Doerr Dallas Valuations recalls a case of significant underinsurance: "I was part of a team evaluating a substantial estate inherited by a prominent farming family. The valuation figures, originally calculated in the mid-1990s and adjusted for inflation, estimated the entire contents at approximately £250,000." Following the valuation, it transpired that the true value came to £721,000. This underscores the importance of meticulously reviewing insurance policies to ensure comprehensive coverage, particularly for high-value items.

That’s because insurance is far from a one-size fits all scenario. Specially designed to cover high-value homes, estates and manor houses, NFU Mutual Bespoke Home Insurance is tailored around you and your lifestyle. We work with carefully selected and trusted valuation partners, giving you the reassurance that all your possessions are in safe hands.

For those who live in larger, higher value homes or have valuable items such as jewellery, fine art or collections, it’s crucial to recognise that standard insurance policies may not offer comprehensive protection. These policies may lack features such as agreed value cover and access to specialist repair or replacement services which are essential for safeguarding your most prized assets.

So how can you avoid underinsurance?

To avoid the pitfalls of underinsurance, consider the following steps:

1. Get an up-to-date valuation: At NFU Mutual Bespoke Home Insurance we work with trusted partners who can, for a fee, provide valuations on your home and contents.
2. Conduct a thorough inventory: Account for all items in each room, including soft furnishings, curtains, and furniture, as well as high-value items like technology. Our Bespoke sellers have an interactive tool that can help with this.
3. Estimate replacement costs: Calculate the cost to replace items with new ones, rather than their original purchase price.
4. Reassess the value of antiques and art: Regularly update the valuations of any antiques or art collections to reflect their current market value.
5. Include items in storage: Don’t overlook items stored away, whether in a safe, at the bank, or in other storage locations.
6. Review policy limits: Check your insurance policy for any set limits on valuables and single items, such as jewellery.

For assistance in getting started, you can use our interactive contents calculator tool.

Regularly review your Insurance coverage

The best way to make sure you don’t fall foul of underinsurance is to review your cover regularly, either when it’s due for renewal, following a large purchase or any other change to your home which may increase its value. Insurance may not be the first thing on your mind after receiving a special birthday or Christmas gift, but it’s worth checking.

Speaking with an expert is crucial when valuing your home and its contents. While purchasing inexpensive insurance online may seem quick and convenient, it could ultimately prove costly if you ever need to make a claim. We offer a nationwide network of local agency offices, ensuring you receive a personal, local service tailored to your specific needs.