If you don’t ensure that the value of your contents is kept up to date, you’ll have to dig into your own pocket if anything from your home is damaged or stolen.

It’s all too easy to become under insured. New electrical goods are a thief’s best dream and the value in these items can soon mount up. Those mobile phones, iPods, televisions and lap toptops are always at the top of most thieves “must have” list. Then there’s all your other purchases you’ve made during the year. So when you look back at what you’ve bought and what the value of your insurance cover is, you’ll see it’s all too easy to become under insured.

If you make a claim and the insurance company concludes that you’re under-insured, the payout on your claim will be reduced. So if you have insured your contents for £20,000 and the insurer estimates that it would cost £30,000 to replace them, then any claim you make could be reduced by at least 50%.

But not all insurers are so tough. Norwich Union Direct pays out up to the limit of the cover and then any shortfall is just hard cheese. More Than says that underinsured claims are reduced by up to 20%.

Most insurers have a minimum of at least £15,000 when it comes to Contents Insurance but that’s rarely enough. Bear in mind that the contents value of a typical family home now stands at just over £45,000.

So why not take a quick check of the value of your contents. And don’t forget to add in your CD collection, many do! Norwich Union values CD’s at £10 each so a collection of 500 will account for £5,000 of cover just by themselves! And then there’s the garden furniture and the things in your garden shed – they’re particularly vulnerable! Even the plants in your garden need to be included!

More Than have been so concerned about the under-insured problem that they’ve recently increased the cover for all of their 470,000 clients by 25%.

A spokes person for More Than said, “The increases will be made from customers’ renewal dates. There will be no direct effect on premiums until then”. Other insurers are certain to follow suit in the near future.

If you take or advice and recalculate the value of your contents, you can find a useful checklist for householders at the web site run by the Association of British Insurers, www.abi.org.uk.

Remember that Contents insurance covers everything that’s moveable in your home – that includes your carpets and curtains. But immoveable items such as kitchen furniture and fixed lighting are covered by your Buildings insurance. It’s the same rule outside. Your child’s toy paddling pool is covered by your contents insurance but your big boys’ and girls’ hot tub is covered under your Buildings insurance!

And whilst you’re at it reconsider the cover you’ve got for your Buildings insurance. The easiest solution is to contact your insurer and they’ll recalculate it for you based on the number and types of room you have and your post-code. It’s not the sale value of your house you have to insure for. It’s the cost of demolition and rebuilding that counts. Your insurer will price rebuilding costs on your post-code.