One in five households in the UK are underinsured, according to the Association of British Insurers. So how can you protect your house and make sure you don’t underestimate how much your home and contents are worth?

John Brady, Head of Commercial at John Lewis Insurance looks at valuing your home and contents and how to make sure you’re
not underinsured.

Q & A with John Brady

Q. How do I know if I’m underinsured?

A. If the total amount insured in your home insurance policy is less than the real, up-to-date, value of the contents of your home – then you’re underinsured. Unfortunately, the average UK household underinsures their home contents by 30%, according to a study carried out by Parogo Home in January 2011. Buying home insurance with unlimited cover for the building and contents is the best way to avoid being underinsured.

Q. Why do I need a record of my belongings?

A. If you don’t have a record of an item, you could struggle to make a claim for it. You should make an accurate inventory of all your belongings and their current value in case you need to make a claim.

Q. How much should I value my items for?

A. The amount you’re insured for should reflect the replacement cost at current prices – not the amount you paid for them. The recent VAT rise also means that valuables will cost an extra 2.5% to replace as new – so be sure to
add that on.

Being underinsured may not seem like a problem until you have to claim on your policy.
Q. What’s the best way to record my
home contents?

A. Keep all receipts, proof of purchase and valuation documents, as well as taking clear photographs of each item. Phone applications are even coming on the market which calculate the total value of your belongings and will store data and photographs for each item recorded. The most important thing is to keep valuations up to date.

Q. What items do people usually forget to insure?

A. Clothes, kitchen goods (oven, washing machine, fridge or expensive cooking gadgets), carpets, rugs or wooden floors, children’s toys or crockery are often forgotten in home insurance inventories. Items in the loft, garden or garage can also easily be left off the list – and don’t forget to update your policy if you inherit a valuable item or heirloom too.

Expert tips

Q. How can I avoid being underinsured?

A. There are a few things you can do or look for, to avoid underinsuring the contents of your home:

• Check single item limits: Limits might be lower than you need. John Lewis has a single item limit of £15,000 for valuables, but some providers offer limits as low as £1,000 per item.
• Review the value of your contents each year: Remember that the sum insured for contents must reflect replacement costs at today's prices – not the amount you paid for them. Use the internet to keep your valuations
  up to date.
• Buy unlimited buildings and contents cover:  You won't be asked to calculate the value of your contents or the cost of rebuilding your home. 

Terms, conditions, limitations, exclusions and acceptance criteria apply. A copy of the policy wording and insurance complaints procedure is available on request.

John Lewis Insurance is a trading name of John Lewis plc.  Registered in England No. 00233462. Registered office 171 Victoria Street London SW1E 5NN. John Lewis plc is an appointed representative of AXA Insurance UK plc who are authorised and regulated by the Financial Services Authority. AXA Insurance UK plc. Registered in England No. 78950. Registered office: 5 Old Broad Street, London, EC2N 1AD