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Much like home building insurance, home insurance coverage should be based upon the amount it would take to replace all of your possessions, if they were completely destroyed.

Contents insurance

So what is the average family worth in regards to their home’s content? The typical figure is more than £45,000. However, to get a true picture of what any specific family or household is worth, you would have to go through every single room, including garage, loft, cellar, and shed, and write down everything you found. Then, you would need to calculate what it would cost to replace each item at today’s prices. The only exception would be clothing and linens, where you would need to lower the value to adjust for typical wear and tear.

If the idea of doing that seems too daunting, no worries – some contents insurers offer a maximum amount of coverage which, if enough to cover all of your possessions (or at least enough to make you happy), eliminates the need to inventory and calculate. If it isn’t enough, some companies will provide additional blocks of coverage for additional costs.

It is important to remember when establishing the amount of home content insurance coverage you require that most insurance companies will not cover losses that are a result of any business activity at home. In order to ensure that you are covered for working-from-home situations, you would need to buy a specific policy that addresses home business situations.