How To Value Contents: Are You Under Insured?


Recently, I renewed my home and contents insurance policy with Budget Direct. During the renewal I was asked what the value of my contents were within the home.

Contents insurance predominantly covers the things within the home that if the house were flipped upside down those things would be falling out. These things would be items like appliances, audio-visual equipment, bedding and line, art, jewellery, clothing, computer equipment (laptops, modems, phones), furniture, white goods (kitchenware).

As we don’t have a lot of stuff within our home, I still wanted to know: Is there an easier way to calculate the approximate contents’ value of my home?

Thankfully, there is a resource that can help to determine the approximate value of your contents based on a few questions about the home and the type of things you have inside your house.

To access the resource referred to by Budget Direct click here. Other contents insurers may have similar calculators.

Generally, the questions asked in a contents insurance questionnaire revolve around two areas:

  1. Where do you live, and what is your home like?
  2. What are the types of things in your home?

Therefore, when going through your questionnaires, be prepared to answer questions along those lines.

Here are the questions asked in the recent analysis I undertook with our contents:

Location & Property

Where do you currently live? Enter your current address for the place you would like contents insurance.

What is your property type? Apartment, duplex, house, semi-detached, terrace/townhouse or villa.

What is your occupancy type? Owner occupied or tenanted. Typically, owner occupied residences will need to include for fixed floor coverings such as carpet, floating timber floors and window furnishings in their home contents sum insured estimate whilst tenants would not include these items.

How many bedrooms are in your home? The number of bedrooms in a home is a key driver of the quantity of contents contained within the home. Generally, the greater the number of bedrooms, the larger the home and the more contents contained within the home, particularly furniture, floor coverings and window furnishings.

Who occupies your home? The number, gender and age of the occupants within a home has a significant bearing on the type and quantity of contents items contained within the home. Generally, the greater the number of occupants the more contents contained within the home, particularly items of a personal nature such as clothing, computer and communications equipment and jewellery. There are 6 different occupant types a user can select including males and females, adults, teens, children and babies. Selection of a different occupant type controls the types of home contents items allocated, for example adults are allocated clothing, computers and jewellery whilst children are allocated clothing, games and toys.

What other rooms do you have? Enter the number of bathrooms, ensuites, separate toilets (etc).

Contents

What level of contents do you currently have? Minimal furnishings (just the basic stuff in each room), Comprehensively furnished but not cluttered (most commonly selected item), Extensively furnished (most storage space is full).

What standard of home contents do you have? Average (no name brands, basic equipment, self-assembled furniture), Quality (above average quality items, well-known brands, superior equipment and joinery standard furniture), Prestige (top of the range designer brands and handcrafted custom furniture).

Add any special items – if you have some specific items that you would like insured, enter their name and value.

Once I had entered all of these details, I was able to obtain an approximate value of the contents of our home.

Valuation On Contents

Depending on the type of answers you’ve submitted in the questions asked you’re valuation on the contents in your home can vary by quite a lot.

Here is what happened when I varied the answers to just two questions in the questionnaire (the first two questions in the Contents section above):

Approximate
Contents Value
Minimal
Furnishings
Comprehensively
Furnished
Extensively
Furnished
Average Contents
(no brand names)
$42,657$78,802$133,403
Quality Contents
(well known brands)
$104,018$197,533$469,984
Prestige Contents
(designer brands)
$243,246$333,340$790,676
Value of contents according to the types selected in an insurance questionnaire

Look at the massive variation in the value of our contents – $42,657 versus $790,676! At the very least this should get you asking yourself whether you have adequate cover on your contents. You might not be insuring at the very top, but by looking at the bare minimum you can see what amount would need to be insured to get you back the bare essentials.

Summary

Being under insured can cause big problems when you need the insurance policy. To get an idea of what level of cover you need for your contents insurance, it helps if you can use a guide to get some level of what coverage you need.

Prior to going through the contents questionnaire I had no idea how much to insure my contents for, but now thanks to the handy tool I can determine whether or not I have adequate coverage.

Ryan

Author of recurrent.com.au, an Australian blog dedicated to help you in your personal finance journey, Ryan has been budgeting professionally since 2015, and budgeting personally since 2009. He enjoys a good bush walk with the family during the cooler months and going to the beach during the warmer months.

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