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How to Calculate Your Holiday Home Contents Value

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What is contents insurance?

A typical contents insurance policy will cover the cost of replacing your possessions following loss or damage due to a variety of events like theft, fire, storms, flooding and water leaks. Cover will vary from policy to policy, so always check the details before taking out the insurance.

Contents insurance is optional, but without it, you run the risk of being left out of pocket should your home be burgled or damaged. The average value of contents in holiday homes is £19,500, yet despite this, 1 in 4 UK households have no contents insurance protection. It’s a huge risk to take.

What’s covered by holiday home contents insurance?

Most policies usually fall into one of two types – ‘new-for-old’ where items are replaced for a new one, and ‘as new’ (also known as indemnity policies), which payout on the items’ depreciated value, as wear and tear is taken into account.

As a rule of thumb, anything you’d take with you if you moved house should be included on your contents policy. Include items like electrical goods, furniture, kitchenware, curtains and carpets, plus items kept in the garden, garage or outbuildings.

Key points

  • Accidental damage to contents (e.g. red wine spilt on a sofa), isn’t typically included as standard but might be available as an add-on.
  • Policies do not normally include cover for personal possessions and valuables – these should be covered by your main residence policy. Any holiday rental guests should take out insurance to cover their valuables and personal items.
  • Most contents insurance policies will have a maximum single article limit on how much they payout. Typically, around £1,000, but could be lower or higher depending on the insurer. It’s a good idea to check this when taking out your policy, to ensure you get the cover you need.
  • If you are a pet-friendly rental, check that damage caused by pets is covered as it’s typically excluded.
  • Keep receipts for high-value items and take photos of items to support claims.
  • Keep the sum insured up to date if you upgrade items in your holiday home.

How to calculate contents insurance value

Before you get a contents insurance quote, you’ll need to know how much your possessions are worth.

Go around your holiday home from room to room, create an inventory of items and put a reasonable value on everything if you were to replace them with new. Also, take into account items outside e.g. garden furniture and hot tub. If you wanted to be extremely thorough, then search online to find out the values.

Ideally, you want to have enough cover in place so that you could replace everything you own if your home burned to the ground.

Contents calculator tools

An easier way is to use a contents calculator to work out the value of your belongings. Bear in mind they are designed for a main residence, not holiday homes, so exclude items that aren’t coved – valuables for example.

https://www.confused.com/home-insurance/contents-calculator
https://www.theaa.com/home-insurance/contents-insurance-calculator
https://www.directline.com/home-cover/contents-calculator 

What happens if I’m under-insured?

Just as overestimating can result in a high premium for cover you don’t need, it can also be easy to underestimate the value of your contents. It’s important to be as accurate as you can, as you don’t want to be left underinsured if you need to make a claim.

Insurers work on an averaging system. If they discover your home contents are underinsured, they will adjust the pay-out accordingly. For instance, if you insure your contents for of £15000, but following a claim your insurer calculates the correct value should be £20000, you are under insured by 25%. Therefore, your insurer could reduce your total claim payment by 25%.
If you have any questions, please add them to the comments below.

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