How much contents insurance do I need?

Trying to get to grips with contents insurance? You’re likely wondering, “How much contents insurance do I need?” Understanding the average value of contents insurance, and calculating the value of your own belongings so that you’re neither under nor overinsured, can feel like a bit of a minefield. But it doesn’t have to be.

We’re here to help.

Firstly, do I really need home contents insurance?

Contents insurance isn’t mandatory, which means that choosing to insure the belongings in your home is a very personal decision. You might choose to insure:

• All of your possessions so that they’re fully protected against catastrophic events like fires or floods
• Only the really valuable items that you can’t afford to replace
• Nothing at all

It might be useful to look at everything you own inside your home, from your furniture and electronics to your clothing and jewellery, and imagine having to buy these items again. Do you have the funds to stomach all or some of this cost? Or would you prefer some peace of mind? Your instincts will likely give you an indication of where you sit on the all-to-nothing scale.

It’s also worth considering that contents insurance often covers more than just damage and theft. Many policies also protect against accidents, like spilling wine on a valuable carpet, or providing temporary accommodation if a major pipe bursts and you need to move out of your home temporarily. Some policies and add-ons also cover the possessions that you regularly take out of your home, such as your phone and laptop.

What is the normal amount for contents insurance?

The average household in the UK typically has contents worth between £30,000 and £50,000, but this figure can vary significantly depending on your circumstances. The key is to calculate your own specific needs rather than relying on average figures.

For instance, a one-bedroom flat filled with basic furnishings might need £20,000 of coverage, while a four-bedroom family home with high-end electronics, designer clothes, and valuable artwork could easily need three to four times more. Many people make the mistake of underestimating their contents value by as much as 30%. 

So if you’re wondering, “Is £50,000 enough for contents insurance in the UK?”, it really depends. For some people, this may be too much; for others, not enough. The only way to know for sure is to run the numbers.

How do you calculate the value of contents for insurance?

Getting a firm handle on your contents’ worth might seem daunting, but breaking it down into manageable steps makes the process much simpler. The most reliable method is to go room by room, creating a detailed inventory of your possessions. Following this guide might be useful:

• Step 1: Start in one room and work your way methodically through the space. Make sure you take note of:
  • Floor coverings like carpets and rugs
  • Furniture, such as tables, chairs, bookcases, and kitchen units
  • Soft furnishings like curtains and cushions
  • Electronics, including TVs, computers, and gaming systems
  • Appliances like fridges and washing machines
  • Valuables like jewellery, artwork, clocks, and ornaments
  • Clothing, including shoes, coats, and bags
  • Personal items like books, sports equipment, and hobby gear

Don’t forget easy-to-overlook spaces like your loft, garage, or garden shed. Garden furniture, tools, and bicycles can add thousands to your total.

• Step 2: Do some research into how much it would cost to replace every item with a new one at today’s prices. Some smaller items can probably be estimated, but it’s worth confirming current prices for some of your larger and more valuable belongings online. Most insurers offer “new for old” coverage, which means they’ll replace old items with a new equivalent. For belongings that are more obscure and difficult to replace, such as antiques and collectibles, you should get an expert valuation.
• Step 3: Speak to your insurer or an experienced broker. They’ll evaluate your list and draw up a policy that suits your unique situation.
• Step 4: Review your policy in detail. In particular, check to see if any limits apply. Some insurers will require you to take out separate coverage for items worth £1,500 or more.
• Step 5: Going forward, try to remember to take photos of valuable items and keep receipts for major purchases. This not only helps you calculate an accurate sum but could be useful if you ever need to make a claim.
• Step 6: Update your policy from time to time. Take a moment to review your inventory and add any new purchases, gifts, and items you’ve inherited, or delete anything you’ve sold or thrown out.

This process might take a bit of time initially, but it’s time well spent to ensure you’re neither underinsured nor overinsured (more on this below). And once you have your list, the major work is done, and it’s just a matter of making a few tweaks as your belongings change.

What happens if I under or overvalue my home contents?

Valuing your contents correctly is important:

• Undervaluing your contents might save you a few pounds on your monthly premium, but it could prove costly if you need to make a claim. Insurers call this “underinsurance”, and it can lead to some unpleasant surprises when you most need help.
  
  Let’s say you insure your contents for £20,000 when they’re actually worth £40,000. If you make a claim for £5,000 worth of stolen items, your insurer might only pay out £2,500 — half the amount — because you were only insured for half the true value. This is known as the “average clause” or “proportional rule” and you don’t want it to trip you up.
• On the flip side, overvaluing your contents will result in you paying unnecessarily high premiums year after year. While this might seem like the safer option, it’s essentially money down the drain. You can’t claim more than the actual value of your lost or damaged items, regardless of your insurance limit.

Try to be as accurate as possible with your valuation. You may wish to add a modest safety margin (around 10%) to your calculated total to account for new purchases throughout the year and any items you might have forgotten. However, don’t stretch this to the point that you’re overestimating.

What happens to my high-value items?

You’ll likely come across the term “single item limit” in your policy. This refers to the maximum amount any single item can be covered for. It’s usually between £1,000 and £1,500.

Items like jewellery, watches, computer equipment, musical instruments, sports equipment, and medical equipment can quickly exceed these limits. Make sure you chat to your insurer about your high-value possessions so they can be listed separately on your policy. Sometimes, depending on the value or nature of the item, it might make sense to arrange dedicated insurance just for that item. Your insurer will be able to advise you.

Are my belongings covered outside of the home?

Step outside your front door and your regular contents insurance might not protect your belongings anymore. Many contents insurance policies don’t cover items like phones, laptops, or glasses. Even items like jewellery or watches might be excluded.

As always, read the fine print closely and check whether you need to add these items as an optional extra. This usually falls under gadget and possessions insurance.

Quickfire summary: How much contents cover do I need?

Working out your contents insurance needs doesn’t have to be complicated. Start by taking a room-by-room inventory of your belongings, remembering to calculate replacement values rather than current worth. Then, submit your list to an insurer or broker and they’ll tailor-make a policy just for you.

Key things to remember:

• Be thorough in your calculations to avoid the pitfalls of underinsurance
• Check your policy's single item limits (typically £1,000 to £1,500)
• Consider whether you need additional cover for high-value items
• Think about gadget and possessions cover if you regularly take valuable items outside your home
• Review your policy annually to account for new purchases or items you’ve disposed of or sold

Taking the time to get your contents insurance right today means you’ll have adequate protection in place when you need it. If you’re unsure about any aspect of your coverage, speak to Howden. Our team of experts is here to guide you. Contact us today.

Also read:

• How much is contents insurance?
• What does home insurance cover?
• Building insurance costs: The lowdown

CONTENTS INSURANCE GUIDES