SUM INSURED CONTENTS INSURANCE COVER
Sum-insured policies base what you would pay for your insurance on what it would cost you to replace all your possessions (for new-for-old cover) or what they are currently worth (for indemnity cover).
This figure is the ‘sum insured’. Unless you have your insurer’s specific agreement to exclude some of your possessions, the sum insured should include everything you own.
It is your responsibility to get the sum insured right.
If the figure is too low, it will not reflect the true replacement values of your belongings and you will be under-insured – meaning that any claims you make will not be paid in full.
If it is too high, you will be over-insured and paying above the odds for your policy: over-valuing your possessions does not mean that you will be able to claim for higher-specification items as the insurer will verify their cost before paying out.
What is the sum insured?
With a sum-insured policy, to arrive at the total amount you should be insured for add together the total of your high-risk items and the total for the rest of your belongings (after making a deduction for normal wear and tear for clothes and linen, as above) and round this figure up to the nearest thousand pounds.
You must insure all your contents for the right amount – if the total sum is too low, whatever amount the insurer pays out will be scaled down proportionately as clawback for under insurance!!