Am I underinsured?

The cost of replacing household items can change over time, and it's worth checking that your cover is up to date. It’s important to make sure you're adequately protected should you ever need to make a claim. Simply put, your cover should reflect today's prices, not the amount you paid for them. If your insurance cover is below the current replacement value of your contents, then you’re underinsured. 

Key points:

• Review and update your contents insurance annually

• Ensure that your rebuild cost is up to date

• Create an inventory of your belongings, update regularly with current replacement values

• Keep receipts, valuations and photos of valuable items for evidence in the event of a claim

• Don’t forget to include clothes, appliances and belongings stored in lofts, garages, outbuildings or gardens - although they may have their own individual cover limits

• Check your policy schedules single-item limits and specify high-value items to avoid gaps in cover

• Update your policy after receiving expensive gifts or inheriting valuable items

What is underinsurance?

Underinsurance is when your cover is less than the cost of replacing all of your belongings or rebuilding your home, leaving you out of pocket if you need to make a claim. Rising prices, home improvements and new purchases can all lead to underinsurance over time.

How to work out if you are underinsured? 

Every year, add up the current replacement cost of everything in your home, not the price you originally paid. Compare this total to your contents insurance cover — if your cover is lower, it’s time to update your policy. Remember to update your policy when you buy, receive or inherit valuable items too. 

Keep a record 

If you don’t have a record of an item, you could struggle to make a claim for it. Make an accurate inventory of all your home contents and their current value in case you need to make a claim.

The best way to do this is to keep all receipts, proof of purchase and valuation documents, and take clear photographs of valuable items.

Top organisation tips 

• File and categorise your receipts and e-receipts, i.e. Home, Car, Clothing.

• Store electrical goods receipts and warranties for six months after the warranty expires.

• Keep clothing receipts for at least a month. Most shops offer customers 28 days to return an unworn item, and at John Lewis we offer a 30-day returns policy.

• Take photos of very expensive items, so you have extra proof of purchase.

The most important thing is to keep valuations up to date. Apps are available to help calculate the total value of your belongings and store data and photographs for each item recorded.

Don’t forget to insure:

• Clothes

• Appliances (oven, washing machine, fridge or expensive cooking gadgets)

• Carpets or rugs

• Furniture

• Children’s toys

• Crockery

• Items in the loft, garden or garage

• Electronic equipment, TV’s, laptops or other gadgets

Update your policy if you inherit a valuable item or treasured heirloom.

How to avoid being underinsured:

Most importantly, remember to review and update the value of your content each year. January is a good time to do this, and once the festive season is over, update your policy with any gifts you’ve received. Check single item limits, as these might be lower than you need and specify high-value items on your policy to ensure they are covered (with a John Lewis Money home insurance policy, unspecified valuables valued up to £3,000 are covered; valuables over this would need to be specified up to a single item limit of £20,000. Overall limits apply). Don’t forget your cover should reflect replacement costs at today's prices, not the amount you paid for them.

How can I get a home insurance quote with John Lewis Money?

You can get a quote for home insurance with John Lewis Money to cover your home and your belongings.

Not only are our Gold, Silver and Specialist home insurance policies five-star rated by Defaqto, but our different levels of cover can be tailored to suit your property.

Plus, our Specialist Home Insurance, brought to you by Covea Insurance, is specifically designed for high-value contents & homes, or unique homes.

This article is for promotional or information purposes only. You must not rely on it as advice.