Undervaluing your home contents can result in lower premiums and may seem convenient in the short term. However, if you actually have to make a claim due to some untoward incident, this can backfire.
For example, consider that your valuables have been insured for 20% lesser than their actual value. When you make a claim, the amount will also be lesser by this percentage, resulting in you bearing the additional losses.
To avoid this situation, the first step is to calculate the value of your home contents. While it can be challenging at first, if done properly, it can reduce the chance of underinsurance or overestimation that may result in extra premium.
Understanding the Value of the Contents in Your Home
The best way to value the contents in your home is by starting with an inventory; that is by identifying each of your possessions in every single room and assessing the cost of each individual item.
- Living space
In your hall, start with electronic items such as TV and music player. Then move on to furniture such as TV stands, bookshelves, chairs, sofas and coffee tables. Finally, cover the upholstery that includes curtains, carpets, and tablecloths.
- Dining and Kitchen
These spaces primarily include the furniture such the table, chairs and meat safe. It also includes crockeries, electrical equipment such as oven, mixer, toaster, refrigerator, etc.
- Bedrooms and Bathrooms
This category houses your most valued possessions such as jewellery, important documents, computers, laptops and other electronic devices. Adding to it are the furniture and bathroom cabinets.
- Outdoor furniture
Though a relatively smaller category, if your house has easy chairs or garden furniture, then it must be included.
When it comes to arriving at the cost, remember to consider each specific bill and receipt to know the value. In case of absence of receipts or bills, refer to product catalogues to identify the prices.
Most importantly, keep revaluating your home contents. Any additional highly priced and valued objects bought after taking the policy must be mentioned to the insurance agency. Remember that antiques, paintings, works of art, cash, etc. are not usually covered. There are suitable content value calculators available online that help with the calculation process.
Content cover, which comes under home insurance policies, encompasses protection for furniture, home appliances and jewellery, electronic equipment. Coverage is extended for damage due to floods, fire, accidents and burglary. At an additional premium, you can also get cover for your personal belongings lost or damaged while travelling.
Evidence Needed for Home Content Claim
In the event of a misfortune such as burglary or fire, one must be able to provide the receipt as proof of purchase of the stolen or destroyed item. If the receipts are not available then credit card or debit card statements must be produced. In situations where neither is available, the bank can be contacted for the monthly statements. Evidences such as photographs and video may also be produced for smoother reimbursement procedures.