When you take out a contents insurance policy, you might be tempted to say you need less cover than you do in an attempt to pay less each month.
But, while this might sound like a smart move to reduce your monthly premium, the reality is far from ideal. In short, underinsuring your belongings means you won’t receive the cash you need to replace them in the event they are damaged or destroyed.
You won’t be covered when you need it most
No one wants to think about a situation that forces them to make a claim to their contents insurance provider – as it could be a burglary or a house fire. However, these things do happen, and it’s important the items that mean the most to you are protected in a worst-case scenario.
Being the victim of a burglary or having your belongings destroyed in a house fire can be a heart-breaking experience to go through. And, not having the right level of cover in place can make this bad situation much worse.
For example, if you guessed that your belongings are worth £5,000, or if you gave this figure to your insurer so you could pay a cheaper premium each month, but they are really worth £20,000, you’d be in a really difficult spot if your things were stolen or destroyed. Your insurer would only pay out £5,000 to you, which is £15,000 short of what you actually need. This means you would have to find the money elsewhere to replace or repair your things.
When you’re already in a vulnerable situation, which is common after being the victim of a burglary or house fire, this adds an extra worry that can really affect your quality of life.
Take time to protect your treasured items
This is why it’s important to spend time working out just how much your belongings are worth. Luckily, there’s a number of free calculators out there that can help you do just that. We think this one offered by Gocompare is a good place to start.
Once you have a rough idea of the combined value of your belongings, you should let your insurer know. Even though you may end up paying more each month, this extra could more than pay for itself, as you’re reassured that your belongings are covered should something happen.
At this point, we must mention that portable valuables like mobile phones, laptops, cameras and jewellery aren’t usually covered by a standard contents insurance policy. For these items, you may have to look for gadgets insurance or personal possessions cover.
For items that hold particularly special meaning – like family jewellery you may have inherited – it’s a good idea to lock these in a secure, fireproof safe. Although the cash value of these items should be covered by a suitable contents policy, they may be priceless and irreplaceable to you, so keeping them safe and secure should be your priority.
If you’re living in a shared house or in student halls, there may be certain conditions to you taking out contents insurance. You can find out more about getting yourself contents insurance if you’re renting here.