How Much Do You Think Your ENTIRE Home Contents Should Be Insured For?

[Jennifer13]

Correct me if I am wrong, Curly, but I am 99% sure that if you are under-insured then your policy usually doesn't fully cover you. For example, your contents is worth $100,000 but you only insure for $80,000. You are 20% under-insured. So when you come to claim on your policy, the company will discount your payout by 20%. So instead of getting $80,000 you will only get $74,000 (ie: 20% less).

So you need to be very careful when setting your insured value.

This is true.

So while you don't think you will replace items, you still may need to include them in your contents insurance, so you don't run the risk of being under-insured (in the eyes of your insurer, remember, not you!). It's not that you'll be getting extra $$ for them anyway, since even if you include what you believe is everything there's very little chance you'll be over-calculating. Insurance companies estimate that as few as 18% of people who have contents insurance are adequately covered.

Remember you only need to list individual items that are of value, so specific pieces of jewellery (with receipts/valuation certificates), or other significant items. We have our DVDs specified as simply 'DVD collection' with the value that they are worth (so higher than the maximum allowed on the policy if you don't specify, if that makes sense). Take photos of these things too, for your records.

It's actually more likely that you won't be claiming for all of your contents, but to replace some things lost/stolen/damaged (fire, flood, etc).

If you're unsure, can I recommend you check out NRMA Insurance's info on their website. There's a section called 'Understanding Insurance' that includes some downloadable brochures on Insurance Basics and What You Need To Know About Insurance (bottom of this page). These might help to answer some of your questions. (You don't have to be an NRMA customer and these are not about their products, just insurance in general).