Contents insurance questions

lodsofemone

Hello

I recently moved into my first flat and I'm in the middle of working out contents insurance for my possessions. Buildings insurance is already covered by a service charge/management company. I've tried to estimate as best I can how much all my stuff is worth but I still have some questions:

1. There are still some things I want to buy (sofa, new TV, rugs, decorations, etc) so these aren't in my estimate yet. Some things, like the sofa and TV, will probably be worth quite a bit. Should I just work out roughly how much those will be and insure them now? Reason I ask is because it looks like insurance companies want ~£20 every time you want to make an adjustment.
   
2. I've been estimating based on how much I think I bought something for new, but this is obviously quite difficult, especially with clothes and things that could lose or gain value like video games or collector's items. Should I be estimating based on what I think I paid for things or what I think they're worth now?
   
3. Does anyone have experience insuring custom-built computers - do I treat it as a single item (since it's worth over £1000, or at least was when I built it) or list individual components?
   

Also any other general advice is appreciated

Thank you

Sandtree

1) None one will be overly concerned if you are over insured but being underinsured is a significant problem (and one that people hit too often). If you will be buying them within the policy year its probably worth factoring them in from the outset (or buy a blanket policy)

2) What you need to base it on depends on what you are buying... if its indemnity then its based on what your would get if you sold everything today. If its new for old then its the higher of the cost to buy it all new today or the items value. Items appreciating is fairly rare and doesnt normally move the needle. For something which is no longer sold and nothing similar is sold then normally the last known price for the item is used. Note that in most new for old policies clothing is excluded and always on a second hand value.

3) If you have receipts for individual components then you can argue that its a list of items not a singular one. If you specked up a machine and someone built it for you and gave you a single invoice then its a single item.  Alternatively, buy a policy with a higher limit for unspecified items... M&S Premier for example allows any item under £15,000 without being specified, many insurers are somewhere between £1k and £15k

General advice? 
a) Remember to include everything, most people look at only the big items and its surprising how much DVD collections, clothes etc all add up to... seem people with a 5 bed house and a £25,000 contents insured but reality was three times that so they only received 1/3 of their claim

b) Home is a complex product and quality varies significantly... need to consider things like if you need Tenants Fixtures & Fittings, Matching Items cover etc

TELLIT01

Very good advice there from Sandtree.  It is very easy to underestimate the value of possessions.  Jewellery, CD's, DVD can all have comparatively small individual prices but the total can quickly add up.  We have accumulated over 500 CDs and DVDs over the years.  Even at £10 each that's £5000!

lodsofemone

Thanks very much for the advice, so better to over insure than under insure. I'll try and work out what else I'll be buying and factor that in.

One more question I have about new for old; do they give you the money for a new equivalent or do they actually buy & send you an equivalent product?

Sandtree

lodsofemone said:

One more question I have about new for old; do they give you the money for a new equivalent or do they actually buy & send you an equivalent product?

Most commonly these days they will give you a gift card or pre-paid credit card linked to their preferred suppliers for the value. So if your £1,000 TV was stolen and you have a £250 excess you'd get a £750 gift card for Currys. 

They obviously dont pay anything close to £750 for that card and so if you ask for a cash settlement the insurer is allowed to reduce the cash to what they would have paid to Currys for it... so it may be £500 as a cash settlement.

Occasionally they will appoint a supplier to do a direct replacement but that creates additional issues if that item becomes faulty in 2 years etc plus it gives you less flexibility... you may decide such an expensive TV is a liability so you buy a £400 one and a new vacuum cleaner with the gift card instead.