Buying insurance can be tricky. If you buy too much, you could end up paying too much in premiums, but if something bad happens, you could also be in trouble if you don't buy enough. So how do you know what's just right?
The most important thing you can do to figure out how much insurance coverage you need is to take your time and value everything in your home. In addition to this, you can use the tips below to get an idea of how much you might need.
Don't be in a hurry and try to guess how much your things are worth. You might be surprised at how far off you are. Walk around your house with a notepad and write down how much everything costs. And when I say "everything," I mean it, from CDs to clothes to furniture to the wicker basket your cat sleeps in!
Once you have done this, you can decide how much contents insurance you need.
Also, keep in mind that if you buy extra things, you should always include them when you renew your home insurance. Even if you only buy two CDs and a DVD every month, this can add up to more than GBP350 a year, which should be added to your contents.
Make sure you know what the insurance company means when they say "valuable." If your policy says you won't be covered for things worth more than GBP1,000 and you haven't told your insurance company about a possession worth more than that, it won't be covered.
If your policy says "new for old," you will get the cost of buying new items to replace the old ones. Every few years, prices go up, so you should always take that into account.
Many insurance policies cover things like patio furniture and garden tools, so make sure to include them in your evaluation if they are covered by your policy.
Think about any items that might be hard to put a price on. For instance, you might have a lot of books or CDs that you want to protect. If this is the case, make sure that these are written down and that the insurance company has agreed on a price.
Most policies will cover things like computers and fax machines if you work from home, so include them in your estimate if they are covered by your policy. You should also ask what the limit is for this kind of equipment, since most policies have one.
