How much home contents insurance do you need?

The simple answer to this question is that the amount of home contents insurance that you need completely depends on your specific situation.

The policy will have a set amount to begin with. This number may be high, or low, which is why you need to take the time to figure out the net worth of your possessions.

Some of the things that you need to cover may not come to mind right away, so the best thing to do is write everything down. Anything that is of value you should right in a book, or type into an excel spreadsheet. This not only gives you a quick reference point but will show the value of an item if you need to make a claim.

Go through your personal items and itemize them into categories such as:

  • Coins
  • Trading cards
  • Jewelry
  • Tools
  • Furniture
  • Bath supplies
  • Kitchen supplies
  • Garden supplies
  • Clothing
  • Electronics
  • Paintings
  • Artwork
  • Collectibles

There may be other things as well that are valuable to you for various reasons. For instance, if you collect knives and swords, they need to be itemized and accounted for. You probably have some type of collection, or a box full of items that mean a lot to you. Remember, though, that the insurance agent will go off the market price for an item during a claim. This is important because specific companies will only give you up to a set amount for an item. For example, if you have a coin collection that is worth thousands, but your coverage only allows for $100, you will lose out substantially because you will only be credited their top amount. Read your policy.

Comparing prices and coverage is important when getting house and contents insurance. Every company has different guidelines and maximum amounts. You want to call your local agent, or to a search on an online site that compares the companies for you. This will save time, but you still need to read through every part of the policy to verify that it is the best option for your needs. The total worth of your possessions, plus a little more to allow for additions, is what is needed.

Each company will have different items that it will cover under their basic policy. Expensive possessions such as jewelry or antiques may need extra coverage to strictly cover them. Talk to your agent to get a list of items that will need extra coverage. As mentioned earlier with the coins you can add on more insurance that will cover the actual cost of collection.

Insurance companies also may only cover a certain item during a certain circumstance. If your policy stipulates that your fur coat is only covered if stolen, then if it is damaged due to snagging on a car door, you will not be compensated if you file a claim.

Therefore, you need to make an itemized list of everything that you have, and how much they are worth. Read the policy in full. If you don’t understand a part of it, ask questions. This cannot be stressed enough. It is completely pointless to pay for insurance coverage that does not cover what you need covered.

Keep up with the top stories from Reader’s Digest by subscribing to our weekly newsletter.