Home insurance: get the right ‘sum insured’

Kevin Pratt explains how to get the right sum insured for buildings and contents cover...

One of the first questions you are likely to be asked when you buy home insurance is ‘how big the sum insured needs to be’.

Now, you need a sum insured for your contents insurance – that’s for your belongings – and another sum insured for your buildings insurance – you need that if you own your property.

So, how do you work out your contents sum insured? After all you need the peace of mind of knowing that you’ve got all the protection you require, but at the same time, you don’t want to pay for more protection than you actually need.

The chances are that the contents – that’s everything you own - from the bedroom to the kitchen and from the lounge to the cupboard under the stairs, are worth a lot more that you think, so it’s important to get the right amount of protection.

We recommend going from room to room and adding up the value of all the contents in that particular room, add them all together and hey presto, that’s your contents sum insured.

One final thing on contents, if you have any particular item that’s worth more than say £1,500 or £2,000 you probably need to list it separately on your policy.

So, what about the sum insured for the building itself?

Now most people, not surprisingly, would think that the sum insured for building insurance, is the same as the market value of the property, this is very often not the case.

For example, places where property prices are high then the market value can be a lot more than the rebuild cost and similarly in places where property prices are depressed, the market value can be a lot less than the rebuild value, so you need to make sure that you get the right figure.

It’s important to get the correct figure for buildings insurance, so that you don’t pay more that you need to and so that you get an adequate pay out if you have to make a claim.

To make life easier, we work out your buildings sum for you when you run a quote on our site, we use your postcode, the type of property you live in and the number of bedrooms, to help us calculate the figure, but if you don’t think it’s right - you might have a surveyor's report with a different number on it - you can simply change it.

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