What is sum insured contents insurance?

When you’re deciding on the type of contents insurance as a tenant or homeowner, it’s important to get the right amount of cover. A sum insured policy puts you in the driving the seat and allows you to choose how much cover you want for your contents. It means that you list your items and what they’d cost to replace. This is different from bedroom rated insurance which gives a value based on the number of bedrooms you have.

This doesn’t necessarily mean that you have to be own a lot of expensive one-off items to benefit from sum insured contents insurance. You may prefer to get an exact value for your belongings rather than insure them based on a lump sum average. Let’s take a look at the benefits of sum insured contents insurance, and when you might want to consider it over a bedroom rated insurance policy.

Get a list

For a sum insured policy, you will have to list the value of the contents inside your home. This includes your clothes, jewellery, soft furnishings, electrical items including like your freezer and your gadgets and anything else you would eventually take with you when moving out. It sounds a daunting task, but if you don’t think bedroom rated insurance gives you enough cover, this is the next best option.

To work out the value of your belongings, find as many receipts and bank statements you can and look online to get the idea of what it would cost to replace everything you own. If you have any antiques of value, you should get these expertly valued.

Once you know how much your stuff is worth, you’ll also know how much cover you need. It’s really important that you don’t undervalue or guess the amount. That’s because if you need to claim, the insurer will pay out in line with your valuation. Research shows that many households don’t have enough cover and if you need to claim, you’ll lose out.

Similarly, if you overvalue your contents, you will just be paying too much for your cover. Shop around to get the right balance between an affordable policy, the right amount of cover and the level of excess.

Weigh things up

You should also bear in mind that if you do make a claim, your policy cost could go up when you renew. Weigh up whether it’s worth losing your no claims discount for a small claim. If you can cover the cost, it might be better to do so.