All about your Sum Insured

What is Home Contents Sum Insured?

Your home contents sum insured is the total amount of coverage you have for all the possessions inside your home. Imagine if you picked your home and shook it. Everything that falls out is your home contents.

The sum insured is the replacement value of your possessions at todays prices and is what your insurer will pay out when you make a claim for possessions that are damaged, stolen, or destroyed.

Why is Home Contents Sum Insured Important?

Having the correct home contents sum insured ensures that you can replace all your possessions at their current value. Without adequate coverage, you might have to cover the costs of replacing items out of pocket, leading to significant financial strain.

What are the Risks of Home Contents Underinsurance?

Underinsurance occurs when the sum insured value is less than the actual replacement cost of your belongings. Risks include:

Financial Loss: You may receive insufficient compensation to replace your items.
Stress and Inconvenience: The financial strain can cause added stress and disrupt your lifestyle.
Delayed Recovery: It might take longer to replace essential items, impacting your daily life.

What Does Home Contents Insurance Include?

Home contents insurance typically covers:

Furniture: Sofas, tables, beds, etc.
Electronics: TVs, computers, smartphones, etc.
Appliances: Refrigerators, washing machines, etc.
Clothing and Personal Items: Everyday wear, accessories, etc.
Jewellery and Valuables: Up to specified limits.
Art and Collectibles: Paintings, rare items, etc.
Sporting Equipment: Bicycles, golf clubs, etc.

What is a Home Contents Insurance Calculator?

A home contents insurance calculator is an online tool that helps you estimate the total value of your personal belongings. By entering details about your possessions, it calculates the sum insured value needed for adequate coverage.

Benefits of Using a Home Contents Insurance Calculator

Save Time: Rather than itemising your belongings, the calculator can create estimates based on a small number of questions. It also removes the need for you to research prices.
Accurate Valuation: Ensures you have sufficient coverage for all your belongings. The more time you spend providing information to the calculator, the more accurate it’ll be.
Easy to Use: Simple interface to input details and get instant results.
Peace of Mind: Knowing you are adequately insured provides financial security.
Regular Updates: Helps you keep your insurance policy up to date with current values.

How Much is an Average Home Contents Value?

The average home contents value varies based on factors like occupants, the size of the home, location and lifestyle. Based on our research, a typical family home in Australia (a 3 bedroom home occupied by two adults and a child) has on the low end around $80,000 and at the high end $500,000 worth of home contents.

You can calculate your home contents value for free using our calculator.

Click the following links to access our calculator for:

Australia

New Zealand

Key Policy Inclusions to Review

When reviewing your home contents insurance policy, pay attention to:

Sum Insured Amount: Ensure it reflects the current replacement cost of your belongings.
Coverage Limits: Check limits for specific items like jewellery, electronics, and collectibles.
Exclusions: Understand what is not covered under your policy.
Excess: Know the amount you need to pay out-of-pocket before insurance kicks in.
Additional Coverage: Consider adding coverage for high-value items, accidental damage, and for portable cover (covering items you take away from your property like phones and watches).

How Often Should You Update Your Home Contents Sum Insured?

Regular Reviews: Update your sum insured annually or after significant purchases. Also, as children grow older, the value of their possessions tends to increase significantly.
Major Life Events: Review your coverage after moving, renovating, or inheriting valuable items.

Common Mistakes to Avoid in Home Contents Insurance

Underestimating Value: Ensure all items are accurately valued.
Not Updating Policy: Regularly update your policy to reflect new purchases or changes in value.
Ignoring Exclusions: Be aware of what your policy does not cover to avoid surprises during claims.

What Factors Affect Home Contents Insurance Premiums?

Sum Insured Value: Higher coverage amounts may increase premiums.
Location: Areas with higher crime rates or natural disaster risks can affect costs.
Security Measures: Installing alarms or secure locks can reduce premiums.
Claims History: A history of frequent claims may increase your premiums.

Tips for Reducing Home Contents Insurance Premiums

Increase Excess: Higher out-of-pocket costs can lower premiums.
Improve Home Security: Enhanced security measures can lead to discounts.
Bundle Policies: Combining home and contents insurance can save money.