How much contents insurance do you actually need?

Ask somebody what their contents are worth and they will look around the room and guess. The guess is almost always low, and it is low for a structural reason: you can only estimate what you can see, and most of what you own is in cupboards.

Why estimates from memory come out short

Three categories get missed almost universally.

Clothing. A household's wardrobe is usually worth several thousand and feels worth several hundred, because no individual garment is expensive. Count coats, shoes and suits separately; they carry most of the value.

The garage and the loft. Tools, garden equipment, camping gear, bicycles, decorations. Individually unremarkable, collectively often the single largest category outside furniture.

Accumulated small electronics. Not the television, which everyone remembers. The tablets, the old laptop still in use, the games console, the headphones, the smart speakers, the routers, the chargers.

Insure for replacement, not for what you paid

Almost all modern contents policies are "new for old", which means the number you need is what it would cost to buy everything again today, at current prices — not what you paid, and not what you would get for it second hand.

This matters most for things bought a long time ago at a lower price. A sofa bought for six hundred is not a six hundred pound claim if the equivalent now costs eleven hundred.

Work it out room by room

The only reliable method is boring: walk each room and total it.

• Living room: seating, television and kit, rugs, lighting, art, media
• Kitchen: appliances including built-in ones if your policy covers them, pots, crockery, small appliances
• Bedrooms: beds, wardrobes and contents, clothing, jewellery
• Bathrooms: usually small, but count towels and cabinets
• Loft and garage: tools, bikes, garden, seasonal, sports
• Everywhere: curtains, carpets if not covered by buildings, books, computers

Do it as a list with numbers, not as a mental estimate. The written total is routinely thirty to fifty percent higher than the guess, which is exactly the gap that shows up as underinsurance at claim time.

Watch the single item limit

Almost every policy has a limit on any one item — often between one and two thousand — beyond which the item must be specified individually and named on the policy.

Things that commonly exceed it and rarely get declared:

• Engagement and wedding rings
• Watches
• Bicycles, particularly electric ones
• Musical instruments
• Cameras and lenses
• Laptops at the higher end

An undeclared item over the limit is not partially covered. It is usually covered only up to the limit, which on a five thousand pound ring is not a good outcome.

Underinsurance can reduce a small claim too

This is the part that surprises people. Many policies apply "average": if you insure for half what your contents are worth, the insurer may reduce every settlement proportionally — including a small claim that is nowhere near your total.

Being underinsured does not only bite in a total loss. It quietly discounts everything.

Recalculate after the events that change the number

The sum insured you set five years ago is almost certainly wrong now. Redo it after:

• Moving house
• A significant purchase — a new kitchen, a bike, a redecoration
• Inheriting anything
• Any year with high inflation, which quietly raises replacement costs across the board

Keep the working, not just the total

The number matters at renewal. The list behind the number matters at claim time, because that is when somebody asks you to prove what you had.

This is the same list as a home inventory, which is why the two jobs are worth doing together — and what you photograph for it matters as much as what you write down.

Waoo Storage keeps both halves in one place: what each thing is, what it would cost to replace, where it lives, and photographs of it. Totals roll up per room and per location, and the whole inventory exports to a spreadsheet you can send to an insurer or an adjuster.

The short version

• Total it room by room, in writing
• Use replacement cost at today's prices
• Count clothing, the garage and small electronics properly — they are what memory drops
• Declare anything over the single item limit
• Redo the number after any significant change