The biggest challenge when buying household contents insurance is to accurately value your possessions. The trick lies in finding the balance between correctly covering yourself so that you’re not underinsured, and making sure you don’t overvalue your contents and end up paying higher premiums than necessary.
Unfortunately, this isn’t as straightforward as simply going through all your possessions and recording what you paid for them. You have to think of what it will cost you to replace them a couple of years down the line, as most insurers offer cover on the basis of “new for old”. This means that irrespective of the age of your household items they will be replaced with new items should you suffer a loss – that is of course as long as you are correctly insured. Furthermore, some of your possessions will also have sentimental value which isn’t reflected in their prices. This gives you a lot more to think about, which we’ll discuss in more detail below.