Burglaries, fires, floods, and storm damage are topics most people try to avoid thinking about. Unfortunately, they do happen, but having adequate insurance for your household contents can make it easier to deal with such a calamity.
If you are applying for new household insurance or revising your existing insurance, you should take a comprehensive inventory of your possessions and keep track of the total value. It’s also worthwhile doing regular annual updates of the inventory, as your situation changes from one year to the next.
The right value
Most people don’t know how to value their goods appropriately, especially if they have inherited bits and pieces or have second-hand items for which they don’t know the cost of replacement.
For insurance purposes, you need to estimate the replacement values of all your possessions as insurers use those values to calculate your premiums. If the total estimated value of your possessions is too low, the insurance company will not cover the full replacement cost of items in the event of a claim.
You must also be sure not to overvalue your belongings, or your insurance premiums will be higher than they ought to be. In the event of a claim, the insurer is unlikely to pay the full amounts for items that have been overvalued, even if you have been paying higher premiums.
It’s important to keep records of your belongings so that if items are stolen or damaged you will be able to prove ownership, which will facilitate your claim.
• Look for online tools and mobile apps to help you value items and that will automatically update values to allow for inflation.
• Photographs of your belongings are invaluable when taking an inventory. With each photo, provide a description of each item to be insured, along with model or serial numbers, the date of purchase or acquisition, and the value.
• Keep proof of purchase for any new items to help determine the replacement value in the event of a claim.
• Printed copies of your inventory should be kept in a safe place and be easily accessible – with at least one copy stored away from home.
• Valuation or appraisal certificates for valuable jewellery, artwork, and other individually specified items should be kept safe along with your inventory.
• For online inventories, scans of your valuation certificates should be included, in addition to the model and serial numbers of all items, and current retail prices.
Taking a detailed inventory can take up a lot of time, especially if you’ve lived in your home for many years and accumulated a lot of possessions. However, it is well worth the effort, to avoid finding after a disaster that certain items were overlooked or not correctly valued.
Taking a detailed inventory and updating your insurance policy might also make you realise that you are paying to insure items you no longer need, which could save you money in the long run.