Most people pay attention to the value of the building – but many just guess at the contents sum insured. Experience shows that the first guess is typically far lower than reality: the things in a home accumulate bit by bit, and together they're worth much more than we'd think. The good news: a quarter of an hour of taking inventory gets you a realistic figure.
- The first guess at a contents sum is typically far lower than reality – the room-by-room method corrects for this.
- What counts isn't the resale price of used items, but the replacement value: what it would cost to buy the same thing new today.
- High-value items – jewellery, watches, art, cash – are typically settled subject to separate limits: list these separately in your inventory too.
Why do we guess so far off the mark?
There are three reasons. Contents accumulate bit by bit – nobody buys the entire contents of a home in one purchase, so our minds never add it all up. The sum insured is based on the replacement (new) value – though at claim time, depending on the policy terms, some items may still be subject to a wear-and-tear deduction, typically based on the item's condition and age.
The result: the contents sum insured often stays below the real value, which is exactly the territory of proportional settlement at claim time. That's precisely why it pays to add the figure up rather than guess at it.
The room-by-room method
Go through your home – mentally, or with your phone in hand – room by room: living room, kitchen, bedrooms, bathroom, hallway, then the places we tend to forget: wardrobe, cellar, garage, balcony. In each room, list the larger items (furniture, appliances, electronics), and estimate the many small things in groups: clothing, books, kitchenware, toys, sports gear.
I've built a ready-made table for this: my home inventory template can be filled in within a quarter of an hour, and it totals things up as you go. The method's strength lies in thoroughness, not precision – you don't need prices accurate to the last cent; an estimate that's roughly right, rounded up rather than down, gets you far closer to reality than a guess. The inventory also pays off at claim time: instead of writing a list from memory when you report a claim, you're working from a document that's already done.
High-value items: a separate list, separate rules
Jewellery, watches, art, collections, cash and especially valuable electronics all need separate attention: policy terms typically set per-event or per-item limits for these, and above a certain value, requirements on where they're stored may also apply. The details are covered in our article on limits – the key point is to flag high-value items at inception, so that cover for them genuinely applies.
Document them too: photos, receipts, valuations – at claim time, this is the quickest route to proving your loss.
What to do with the finished figure
Let the inventory's final total be the basis for your contents sum insured – round up rather than down, since the goal is for everything to be replaceable after a claim. The figure isn't set in stone: at renewal, value tracking carries it forward, and after a major purchase – new kitchen appliances, electronics, a bicycle – it's worth asking for a mid-term increase. Once the inventory exists, updating it each year takes just five minutes.
Once the inventory is done, the rest moves quickly: before you sign, it is worth checking the sum insured and the building-versus-contents split (what belongs where) – so no gap is left in either category.
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