Make Sure Your Home Insurance Covers This!

Read these tops tips for the 'walking wealthy'.

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The next time you take a walk -- to the shops, perhaps, or to the gym -- consider exactly how much you're worth.

Not as a human being, or even as the sum of all your worldly assets. I mean -- what is the total monetary value of the belongings you have on your person?

Are you one of the `walking wealthy'?

The average UK adult now carries £972 worth of belongings around with them, according to a recent study by Zurich Insurance.

Unsurprisingly, gadgets like mobile phones, Blackberries and iPods often make up the largest chunk of a person's `walking wealth', with designer bags and flash jewellery also playing a big part.

Protect yourself!

However, it seems many of us are failing to grasp what a splendid target we are for muggers. Some 74% of those questioned were not aware of how much their possessions cost, and 57% underestimated their value by over £380.

I was guilty of this earlier today. My mobile phone is ancient, I don't wear much jewellery and I don't even have a Blackberry, so after a moment's thought I decided what I was carrying couldn't possibly be worth more than £300. 

When I sat and totted everything up, however -- bag, clothes, accessories, gadgets and all -- it came to nearer £500.

And we aren't doing enough to guard against disaster. When it came to protecting their possessions, a quarter (23%) of those surveyed admitted they didn't have any sort of personal possessions cover to insure items away from the home.

This is worrying stuff. If I'm mugged or pick-pocketed, the last thing I want is to face financial as well as emotional trauma?

So, in a nutshell, make sure you understand the value of the items you carry around with you -- and check that your home insurance policy covers them all, wherever they are.

Home insurance checklist

If you're choosing a new policy -- here are a couple more things to think about:

Unlimited cover: It may be worth your while to pay a little bit more for a policy that offers unlimited cover.

When your home is insured for an exact amount, you need to be very clear about just what everything is worth. If you forget to include anything, underestimate the value of an item or add the whole lot up incorrectly, you run the risk of being under-insured.

If this happens -- and you lose the whole contents of your home (through fire, for example) your provider is under no obligation to pay out for your full claim.

Just remember that even with unlimited cover, there's likely to be a limit (usually around £1,500) on each individual item.

Added extras: Some insurers offer valuable extras which can make a huge difference at a difficult time.

A `Christmas cover increase' means that your insurer will automatically increase your level of cover over the festive period, to guard against burglars making off with your tree presents and other seasonal disasters.

`Emergency home repairs cover' means your provider will pay out if you need to deal with a domestic emergency quickly -- like getting a burst pipe fixed within 24 hours.

And if you haven't made a home insurance claim recently, it's also worth hunting down a policy that offers you a `no claims discount'. The percentage discount will usually depend on the number of consecutive claim-free years you have under your belt.

How to get cheaper cover

So, you've decided on the cover you need -- but you don't want it to cost the Earth.

Shop around! In cost-cutting terms, I think the single most important thing you can do is shop around for your next policy when your current one expires.

When it comes to home insurance, loyalty very rarely pays. Usually, new customers are offered the best deals, while existing ones are the cash cows of the industry.

My recent experience demonstrates this perfectly: Last week, my partner and I received a letter from our home insurers, telling us that our policy was due to expire.

They emphasised that we needn't do anything; unless we contacted them, our policy would be renewed for another year.

All most helpful. until I tracked down the teeny writing at the bottom of the page -- which informed us that on renewal, our premium would double. Eeek!

Obviously, we sprang into action and found a much better deal elsewhere - as new customers. You have been warned!

Bulk buy: Buying your buildings and contents insurance from the same provider can often work out cheaper.

It also makes things simpler if you do have to put in a claim - as you only have to deal with one organisation.

Bump up security: Finally, making your property more secure could have the added benefit of slashing your premiums.

If you fit burglar alarms linked to the police network, and install good quality window and door locks, and you could see your premiums fall by 15% or even more.

Good luck!

Visit The Fool's Home Insurance Service to help find the best deal for you