Home > Home Insurance FAQ's > My renewal from my existing insurer says that my buildings are insured for £400,000 and my contents are insured for £50,000, and the quote is high when I use these values – why?

Home Insurance - Frequently Asked Questions

My renewal from my existing insurer says that my buildings are insured for £400,000 and my contents are insured for £50,000, and the quote is high when I use these values – why?


Your existing insurance may be on a 'bedroom rated' basis. This is when the insurer estimates the value of your property and contents based on how big your house is, which they've estimated by the number of bedrooms you have.

Most people will not have a buildings rebuild cost of £400,000, or higher. This could simply be a waste of time. Why pay for cover you don't actually need? You can find out how much you home would cost to rebuild (and therefore how much you should insure it for) by either using the online calculator available from the Association of British Insurers www.abi.org.uk or by looking at a recent surveyors report of your property.

Remember: normally you would never insure your house for it's market value, you should only insure buildings for their rebuild cost. When you insure for market value you are essentially overestimating the risk that you pose, and as a result you pay more, without increasing the insurer's exposure to risk. Don't do it — isn't this worth spending a few moments to get right? By spending a little time now you could save a small fortune over the years, all of which is extra money in your pocket.

On the same basis, it is unlikely that you have £40,000 or £50,000 worth of contents. So you may be paying for cover you don't need. With our policy you pay for exactly what you need, and we increase the cover each year in line with inflation. You should only pay for the cover you need, don't insure for silly amounts that serve only to raise your premiums and flatter you. Take some time to walk round your home, take a calculator with you and add up the value of your belongings in each room. The total is what you should insure your contents for. (take care with clothes as these will not be replaced on a 'new for old' basis, for example a man's suit is estimated by insurers to have a life of 5 years, therefore if you claimed for a 6 year old suit this would have no value as far as an insurer is concerned).

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