Contents Insurance – how much to insure for?

[Deleted User]

Hi there, I was wondering if any of you friendly, worldly-wise MSE’ers can help me with my contents insurance question, which is – how much to insure for?

We have a one bedroom flat in London, and currently have cover for £100k contents – this is costing me around £56 a month. Am I insuring for too much? When I first took out insurance many years ago, the broker I was dealing with said things like – well, you have a lot of DVD’s, CD’s, books etc. Which would cost a lot to replace. Well, if i think about it and I lost these in, say, a fire – I wouldn’t replace them all. Things to replace would be carpets, furniture, clothing etc. (anything else to consider?).

So, I was wondering, should I reduce the amount I insure for (as this obviously affects the premium) (there are 3 items that I would need to put additional insurance for as they are valued over £1500 each).

Sorry if this seems like a silly question – but any advice would be welcome.

My contents renewal is not due for a couple of months, but I want to a) get it right, b) use cash back sites and make it as MSE as possible, for the best price.

dacouch

It is very very important that you Insure your entire contents for their full current replacement cost, in an ideal world you should slightly over insure as a safety measure.

Insurance Policies contain a condition which is either called Under Insurance or Averaging. This in effect means that say you Insure your contents for £100000 but when you have a claim the Insurers discover your contents would cost £110000 they would say you are Under Insured by 10%. They would then deduct 10% from any claim you make even if you were only claiming for a television for £500.

It is therefore very important that you make sure you cover everything for the full replacement cost as when you put a claim in the first thing the Insurers will check is whether you have enough cover. So you have to insure your cds for the full amount as otherwise it will affect any claims payments you receive

The price you are paying for £100000 sounds fairly competitive for the amount of cover you have and for London. Have a word with your broker and ask them for ways of reducing your premium.

Be carefull if your eyes light up when you see a direct company offering contents cover of £100000 or unlimited. These are not really designed for people with a lot of contents but for the average person. They have an inner limit for what they class as Valuables or High Risk items which normally includes jewellery, works of art etc but some will include camera equipment, computers and televisions. They can limit the total amount for Valuables or High Risk items to as low as £6000 which is a very low amount. So if you are looking around make sure you read the small print about High Risk Items or Valuables to ensure the company offer enough cover.

Janetew

Hi goochie

That seems an awful lot to pay. I have a 4 bedroom house with contents cover of £40k which costs me £57.90 a year with Bradford and Bingley. The first thing you have to decide is if your contents are worth £100k if you lost the lot and had to replace them.

[Deleted User]

Thanks Dacouch for your very quick response, I will have a think about this and start "totting" up the value of replacing things, to see what I come to.

[Deleted User]

Thanks Jane, I really need to have a look at what might need replacing if we lost everything and add it all up - I can't believe that it would come to £100K, but as Dacouch says, you don't want to under-insure either.

Another silly question - do I need to add things like carpets, furniture, electrical equip, kitchen replacement (I guess if there was a fire in the kitchen that would come to a pretty penny!).

dacouch

The basic rule for working out whether an item is contents or buildings is would you take it if you moved house or would it move if you turned the house upside down. So Carpets are contents but hard floors are normally buildings, linos are contents. Your fitted kitchen / bathroom / Bedroom are buildings except for applicance not built in eg a free standing fridge.

If you click on this link it is an online contents calculator which will hopefully help you calculate the amount you need

http://www.nfumutual.co.uk/extras/contentCalc/index.asp

I would suggest you keep a running total of Jewellery, Works of Art, Items of Precious Metals, Camera Equipment, Collections eg Stamp and Curios as Insurers tend to class these as High Risk Items or Valuables so it will help you choose the best policy. It would also be worth keeping a total for computers and computer equipment, home working equipment and audio visual equipment (Tvs & Steroes etc) as some companies will class these as High Risk / Valuables

[Deleted User]

Thank you so much for the link - that helps focus the mind! Wonderful advice, I will start over the weekend, might take a while though. I was pretty sure I was over-insured, but this way I'll be able to break it down and work it out properly.

Really appreciate you spending the time to help out. You are a STAR.

Have a lovely weekend.

By the way - I don't have a problem with the premium necessarily, just want to make sure I am insuring the right amount so that I can get the right quotes when it's up for renewal.

dogbot

An increasing number of insurers will offer notional or bedroom limits now, so don't ask you for a sum to insure on but will give you fairly high set limit to start with. As one of the above says, be sure you understand all the inner limits first, but there is no reason this shouldn't be suitible if you know what you are buying.

As others have said, the amount you are insurering for seems very high. We live in a 1 bed in south london, both young professionals, and have 20k cover. We have old/cheap furniture though.

I don't think anyone has pointed out that while most stuff is insured new for old/full replacement, most insurers won't cover bed linens on this basis, and many are now also excluding clothes from new for old cover. I am not sure how these are handled at claim but it would be on some sort of negotiated indemnity basis.

[Deleted User]

Thanks Dogbot

As I said, I am pretty sure that I am way over-insured - if I find out my contents come to £100K then I am going to have to start ebaying and paying off the credit card! :rotfl:

Oh, and good point about new for old on clothes, linen etc. thanks

dogbot

goochie wrote: »

By the way - I don't have a problem with the premium necessarily, just want to make sure I am insuring the right amount so that I can get the right quotes when it's up for renewal.

Not worried about the price? You must be the only person on MSE! If you are willing to pay a bit more to top cover, try Hiscox. I know a few chaps who are or have worked loss adjusters for many years each, they are all covered with Hiscox.

[Deleted User]

dogbot wrote: »

Not worried about the price? You must be the only person on MSE! If you are willing to pay a bit more to top cover, try Hiscox. I know a few chaps who are or have worked loss adjusters for many years each, they are all covered with Hiscox.

Maybe not worded very well, all I am saying is if, when I look around (armed with all the facts and correct contents amount), I discover that I am paying a fair price for my insurance, then great, if I can reduce the premium and get the same level of cover, I can assure you I will.