Home Insurance - Am I paying too much?

homeless9

Hi,

So, I got onto the property ladder 4 years ago and obviously set up home insurance...

In April this year the amount I was paying jumped from £18 to £27 per month. At the time I was surprised at the big jump, but didn't really look into it. I did read an article that said such insurance had jumped 30% this year....

I have now taken the time to look into my policy and noticed that my house is insured for £1million and my contents are insured for £75,000....

My house is worth ~£400,000. The contents are maybe worth £10,000. I cannot remember what value I put down for contents protection at the time I set up my insurance policy 4 years ago, but I don't think I would have gone any higher than £30,000....

Question:

Is there a reason why the insurance company would have put down a higher valuation for both the house and contents on my policy? is this all normal? I assume if my house burnt down they'd cover me in renting out another home whilst mine is fixed, but why would the contents insurance be £75,000?

Are these figures on my policy too high and therefore I am paying too much per month in insurance cover?

BarelySentientAI

Because it saves hassle arguing about and recalculating rebuild values or contents amount when there's a claim.

I don't believe you only have £10k of contents in a £400k house, unless you're in a prestigious part of central London and even then I'm not sure about it.

XRS200

And it's the rebuild cost of the house that matters for buildings insurance not the market value.

£10k is very low.

Try a comparison site and you'll quickly find our the going rate

Bue21

I think a lot of companies use a set amount for both rebuilding costs and assumed contents. You only need to change these if your particular circumstances need greater cover. We have just renewed our insurance and found many companies quoted for £1 million rebuild and £75,000 as a minimum contents (saves the possibility of being under insured)

DullGreyGuy

homeless9 said:

Hi,

So, I got onto the property ladder 4 years ago and obviously set up home insurance...

In April this year the amount I was paying jumped from £18 to £27 per month. At the time I was surprised at the big jump, but didn't really look into it. I did read an article that said such insurance had jumped 30% this year....

I have now taken the time to look into my policy and noticed that my house is insured for £1million and my contents are insured for £75,000....

My house is worth ~£400,000. The contents are maybe worth £10,000. I cannot remember what value I put down for contents protection at the time I set up my insurance policy 4 years ago, but I don't think I would have gone any higher than £30,000....

Question:

Is there a reason why the insurance company would have put down a higher valuation for both the house and contents on my policy? is this all normal? I assume if my house burnt down they'd cover me in renting out another home whilst mine is fixed, but why would the contents insurance be £75,000?

Are these figures on my policy too high and therefore I am paying too much per month in insurance cover?

There are two ways you can price home insurance:

Sums Insured - customer says rebuild cost is £250,000, total contents £30,000, valuables £5,000 and the insurer calculates on that basis

Blanket/Bedroom rated - the insurer has preset limits like £1m rebuild and £75k contents and instead asks how many bedrooms, bathrooms, kitchens etc they have and prices it on that instead. 

The advantage of blanket policies is that they have very high limits so less chance of being under insured and less need to recalculate how the value of your contents changes each year. 

Are you sure that if you had to replace every single spoon, pillow, sock, chair etc in your home brand new would be only £10,000? The UK average is £51,000 of contents according to Confused.com and that ignores the average home is smaller than a 4 bedroom house and the average person is under insured because they dont realise how much having 20 towels costs etc etc. 

Did see an insured that had declared their contents as £10k but were claiming for a £1,000 TV. Wouldn't normally sent an adjuster for such a TV but it's unusual for a TV to represent 10% of your total contents. The assessor estimated there was more than £75,000 of contents and he's been unable to access a safe to establish its contents. Claim was declined and policy voided for reckless false declaration

lisyloo

The Contents is for replacing everything in your house at a NEW price.
So all your clothes, kitchen contents, sheets.
I think you['d be suprised.
I would suggest you go round every room and estimate the new price for each room.
£10K is very low.

p00hsticks

lisyloo said:

The Contents is for replacing everything in your house at a NEW price.
So all your clothes, kitchen contents, sheets.
I think you['d be suprised.
I would suggest you go round every room and estimate the new price for each room.
£10K is very low.

Agreed.
Just the very basic large items - bed & bedding x number of bedrooms, wardrobes, chest of drawers, desk, sofa, dining table & chairs, TV, white goods (fridge, washing machine, dishwasher, cooker, microwave) would often be close to £10k new, before you start getting onto things like clothing, nicknacks, kitchen utensils, books, CDs, etc...

TELLIT01

My insurers don't put a figure on the value of the property at all.  Many people, possibly most, underestimate the value of contents.  Just as an example, and possibly showing my age, I have about 300 CDs.  They would typically have cost about £10 each, so those alone add up to around £3k.

DullGreyGuy

TELLIT01 said:

My insurers don't put a figure on the value of the property at all.  Many people, possibly most, underestimate the value of contents.  Just as an example, and possibly showing my age, I have about 300 CDs.  They would typically have cost about £10 each, so those alone add up to around £3k.

So it's a blanket/bedroom rated policy. 

Whilst they may not put a limit on general contents or rebuild even "unlimited" policies do tend to have inner limits on valuables, single articles/sets, contents in the garden etc. 

homeless9

lisyloo said:

The Contents is for replacing everything in your house at a NEW price.
So all your clothes, kitchen contents, sheets.
I think you['d be suprised.
I would suggest you go round every room and estimate the new price for each room.
£10K is very low.

I just went through everything and it genuinely comes to ~£10,000 and I have a pretty nice expensive TV, coffee table, sofa, bed etc. I don't buy budget stuff from Ikea. I've included all white goods from the kitchen too, that's the microwave, dishwasher, fridge-freezer, cooker, kettle, toaster, washer/drier.

I think it's the fact I live on my own. Maybe people think because I said I have a £400,000 home that means I have a decent sized house - I don't - it's a small 2 bedroom house in Surrey. My downstairs is something like 7 metres x 6 metres which is an open plan kitchen and living room space, with a small downstairs toilet too.

It makes me wonder what people have in their houses if £10,000 is deemed low.... designer clothes? expensive bikes? Rolex watches, expensive jewellery, suitcases of cash, special breed of Corgi that also could perish in a fire?

BarelySentientAI

homeless9 said:

lisyloo said:

The Contents is for replacing everything in your house at a NEW price.
So all your clothes, kitchen contents, sheets.
I think you['d be suprised.
I would suggest you go round every room and estimate the new price for each room.
£10K is very low.

I just went through everything and it genuinely comes to ~£10,000 and I have a pretty nice expensive TV, coffee table, sofa, bed etc. I don't buy budget stuff from Ikea. I've included all white goods from the kitchen too, that's the microwave, dishwasher, fridge-freezer, cooker, kettle, toaster, washer/drier.

I think it's the fact I live on my own. Maybe people think because I said I have a £400,000 home that means I have a decent sized house - I don't - it's a small 2 bedroom house in Surrey. My downstairs is something like 7 metres x 6 metres which is an open plan kitchen and living room space, with a small downstairs toilet too.

It makes me wonder what people have in their houses if £10,000 is deemed low.... designer clothes? expensive bikes? Rolex watches, expensive jewellery, suitcases of cash, special breed of Corgi that also could perish in a fire?

No, we just think you have seriously miscounted.  I do not believe you genuinely have less than £10,000 of contents - I think you have missed things out or underestimated the price of replacing them. 

"Pretty nice expensive" TV (£500?) + coffee table (£150?) + sofa (£500?) + bed (£250?) + mattress (£500?) is probably near £2000 already.  The kitchen white goods you've written down is probably another £1000 at least.

Then you have whatever furniture is in the other bedroom, curtains, carpets, crockery, cutlery, contents of kitchen cupboards, clothes, shoes, coats, mobile phone, bags & purses, bedding, cushions, (just the first few things that spring to mind, most of which seem to start with 'c' for some reason).

If you think contents totalling £10,000 includes designer clothes and Rolex watches, you are way way away from what anyone would consider normal. 

Do you only own one plate, one bowl, one pair of shoes etc..?