Help! I've been given £800,000 of things for the house! Contents insurance huge!

steadynerve

Can anyone comment if this is correct or ways to help?

I like to live frugally and furnish my house with free stuff given my friends and stuff from charity shops etc. I am a little bit of a hoarder in that I keep stuff in cupboards (old clothes i may one day fit again!, stuff for kids when they are older) etc that may come in useful in the future!! Also I'm a bit slow in turning out old stuff as well!!

I estimate I've paid about £5-£10k for all the stuff in my house. When I come to take out contents home insurance I find all the policies sold are "new for old" types and I am required to value the contents at the new replacement cost. I did a check on one shelf of kids toys eg cludeo, monopoly etc. About 20 games most given to me or 25p or 50p from charity shops. Total cost paid about £5 but I estimate the board games cost £20 upwards new so the total replacement cost is around £say £400.

Applying this say ratio to the rest of the house 5:400 ie 80 times more. I get my house contents valued at £400,000 to £800,000. And the premiums are huge by my frugal standards.

A friend came round the other day with 3 black bin liners of clothes stuff for the kids she had tiurned out as a gift.. It was 50 items a bag so i estimated say 150 items at £15 each new = £2,250. So I was torn wrther i needed to rasie the contemts insurance cover by another £2,250 and pay the extra premium charges or keep quite and commit insurance fraud or refuse the items as too costly too insure.

It really seems strange I need to pay the same as a very very wealthy person for home insurance cover on most main stream policies.

I also understand that most policies have a clause re under insurance so that if I only say mu contents are £10k I will be deemed to be 80 times underinsured and a claim for say a £800 of stolen tvs and computers would be reduced to £80 and so I would get nothing with a £100 excess.

There are supposedly wear and tear policies also caled indemity policies out there where i can just insure for the cost of my stuff and get this back but i have not been able to find any it seems a very specialist market but is my living style really that unusual for the uk?

How do others deal with this issue? Or have i got this wrong?

InsideInsurance

I think you are being optimistic that you are getting everything for an 80th of its retail value.

Rather than saying you've spent 10k and multiplying it by a standard factor you'd be better off doing this in a more standard method of creating an inventory of everything you own (which would be necessary in the event of a house fire etc so easier to do before everythings turned to ash). Once you have that you can price up the larger items (sofas, TVs, dining table etc) and known high value items (engagement ring, wedding bands etc). Then for more common items you make an approximation so 200 CDs at an average of 8 quid each etc

This will give you a much more accurate figure than 800k, unless you really are a charity shop queen and have wardrobes full of Channel and Prada

maninthestreet

I have visions of the OP going around their house with a clipboard, valuing items such as a box of paperclips or a bic biro pen....

InsideInsurance

maninthestreet wrote: »

I have visions of the OP going around their house with a clipboard, valuing items such as a box of paperclips or a bic biro pen....

In theory you should, your contents insurance is for the COMPLETE contents of your home. I have seen many people with tiny sums insured come unstuck because they'd only factored in major items and not considered their cupboard full of spirits, cleaning products, draws full of underwear etc which individually obviously arent much but when you add it up for a family of 4 can come to a pretty penny (esp when you talk about people having a 10k total sum insured)

*Scarlett

While it's never a good idea to underinsure I don't think you have have gone about this the right way.

You can't value the contents of your home by looking at one shelf of kid's toys.

Most mainstream insurers offer £50k contents cover as standard - some £75k or above.

For most people this will be adequate.

If you think you need to insure for £800k then you will need a specialist and will be looking at hefty premiums.

Many insurers offer contents calculators eg

http://www.legalandgeneral.com/insurance/insurance-products/home-insurance/contents-calculator/contents-calculator.html

steadynerve

After a bit more research I can see that wikipedia and New Zealand are both onto this problem and News Zealand have banned condioton of average clasuses.

http://en.wikipedia.org/wiki/Condition_of_average

It seems it really is true i have to ensure for £800k or risk no payout even if just one item in my house get stolen sue due to the codition of average clause.

Does anyone know of a list o insurers that do not apply the condition of average clause?

steadynerve

easily 700 items just in my bedroom

4 bedrooms garage and 3 downstairs room

call that 4000 items in total - consercative

paper clips are about £1
any items of clothing is around say £6 for a child or £20 for an adult.
Books £12 each

lets say
25 items £150 3750
50 items 100 5000
50 items £75 £3750
100 items £50 or more £5000
800 items £25 or more £20000
500 items £15 £7500
500 £10 £5000
500 £6 £3000
500£5 £2500
500 items £3 £1500
500 items £1 £500

£53,750

Now the other thing that worries me is I dont have the time to do a list . or keep receips for 4000 items - does anyone. so if the house burns down completely . I might not be able to prove ownership of one item- so that anything that is not recognisable from the fire couldn't be claimed before eg all clothes and books. So why did i hve to wnsure for it the first place!!! the condotion of average clause is very unfair!!

steadynerve

so whats really going on is I want to ensure items over £50 and have about 225 of these at a replacement value of about £20,000 - these are what i woud remember and try to claim for in a disaster. But i am also forced to ensure all the other bits and bobs with a replacement value less than £50 and an actual market value of pounds that i dont really want replaced or insured and would never be able to claim for anyway and these come to 30k++.

JimmyTheWig

steadynerve wrote: »

keep quite and commit insurance fraud

I don't believe that under-insuring is insurance fraud.

I also understand that most policies have a clause re under insurance so that if I only say mu contents are £10k I will be deemed to be 80 times underinsured and a claim for say a £800 of stolen tvs and computers would be reduced to £80 and so I would get nothing with a £100 excess.

Could you not pick up a TV from freegle if yours got stolen?
I'd almost be tempted, in your case, to not have contents insurance.

There are supposedly wear and tear policies also caled indemity policies out there where i can just insure for the cost of my stuff and get this back but i have not been able to find any it seems a very specialist market but is my living style really that unusual for the uk?

Maybe a broker could help? But, yes, it does sound like your living style is unusual.

How do others deal with this issue? Or have i got this wrong?

I think others would clear out the stuff they don't need. Sorry.

paulineb_2

I think its a bit odd having to price what a bag of second hand clothes would cost to replace. I think the average persons clothes comes in at about £4000, some peoples will be more and some will be less and yes theres nothing wrong with living frugally, but seriously you are going around the house pricing what it would cost to replace a paper clip??

If anything happened to my home and I hope it doesnt, Id be pricing what it would cost to replace my sofas (which I got second hand), my table and chairs in my living room also second hand, my bed, my pc, my cooker, my clothes, my fridge.All the essentials.

I certainly wouldnt be pricing what it costs to replace the superfluous bits of crap I have hanging around.

Just because it would cost you 800 grand to replace what you've bought or been given new doesnt mean that whats in your house is currently worth 800 grand.

You have 700 items in your bedroom? Theres nothing wrong with living frugally and buying second hand and accepting second hand stuff from people. But if your house is full of "stuff" that you arent currently using, maybe its time to give some of that stuff back to charity.

I dont have a tenth of the stuff you have but I still have too much and Im clearing it out. And its a shame its now causing you stress.

tyllwyd

I think that there is a deduction for wear and tear on clothing and household linens, so your second-hand clothes probably don't need to be insured at their full value when new (and an average of £15 per item for kids clothes seems high to me). And kids board games at £20+ also seems too generous - I'd have gone for an average of £10-£15 personally.