Homeowners Warned On Home Insurance Content Cover

Many years ago Christmas was all about family; and presents, although required, were a small affair. In most households the most expensive present was likely to be a bike or train set.

Nowadays, however, the scene is different. Although family is still important in these modern times the presents have changed dramatically with mobile phones, portable music devices, laptops and games consoles being the norm. Many people do not realise how much money they have brought into the house over the holiday period until the worst happens and they are burgled.

It seems we should be checking our home insurance is enough to reflect the true value of home contents following Christmas.

Many home insurance policies will automatically extend the contents cover that they offer to take into account the value of presents and food - normally by around ten per cent.

But the allowance expires in mid-January, potentially leaving many homes underinsured.

"Householders should check their insurance policy documents to ensure they are not underinsured following Christmas," said a senior home insurance underwriter.

"Although some insurers will increase contents cover over Christmas, this still leaves the problem of re-evaluating your contents in the New Year."

"It's vital for people without unlimited cover to remember to update their insurer with any changes to their contents value and be aware that some insurers [...] will penalise customers who underestimate the value of their belongings," she concluded.

Because of the way that home insurance firms calculate cover, being underinsured can create real problems for all claims, even if they are for much less than the amount you are over covered for.

"If you have £45,000 worth of contents but are only insured for £30,000, your insurer may consider you to be 50 per cent underinsured and only pay half of any claim, even if it is less than the £30,000 sum insured," explained a home insurance advisor.

If you would like to know more about home insurance why not ask AnswerBank Business and Finance.