Home contents value widely underestimated

Although most people are very aware of the value of their homes, many significantly undervalue the value of their possessions.

Insurer Legal & General calculates the average value of the contents of a house is over £40,000 – yet the majority of homeowners estimate the cost of replacing the contents of their house at less than £40,000.

Over a quarter – 27 per cent – valued their contents at less than £20,000, so potentially 100 per cent less than what their cover should be.

And 15 per cent of the 4,000 people surveyed had no idea how much it would cost to replace the contents of their homes.

Legal & General has developed an online calculator that takes a customer through a virtual house, enabling them to 'tot up' their possessions, room by room. The tool helps remind customers of everything they might need to include in their cover – including soft furnishings, CDs and mobile phones.

The insurer believes many people are underestimating how much their possessions would cost to replace as the average value quoted for the contents of a living room was just over £6,000, yet Legal & General has estimated that the value of the contents could be closer to double that amount, at nearly £11,000.

Garry Skelton from Legal & General said: "Many of us seem to be seriously under-estimating the value of the contents of our homes.

"Obviously every home is different and so the online calculator has the flexibility for customers to enter amounts that are appropriate to them and so help to provide a more personalised valuation.

"Our customers can then be confident that they can arrange for the appropriate level of home contents insurance cover to be in place and so not risk being underinsured."

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