Lost and found

by Sarah Modlock

2 March 2005

You don't have to be a fashionista to love dressing up; most girls are very attached to what's inside their wardrobes.

When British Airways lost my luggage on a flight home from Rome last year I was pretty fed up. Then, as I reviewed the contents of the case in my mind, I felt increasingly traumatised by the prospect of never being reunited with the pretty dresses and slinky shoes I had packed for the trip. But while the loss of irreplaceable little numbers carefully selected over years of shopping is one thing, the sheer value of clothes owned by the average British woman is another. From the age of 14, women splash out an average of £124 a month on shoes, clothes and accessories. With a life expectancy of 79 years, that's an impressive 65 years and at least £96,720 of retail therapy. Now, where did I put my debit card?

These figures are from a poll of more than 3,000 women by Churchill Home Insurance as part of an ongoing study of the value of the nation's home contents. Forget one suitcase (which was found), imagine losing everything. Apparently, if our wardrobes went up in smoke, most of us would not have enough insurance to cover the cost, let alone the emotional meltdown. 'Clothes are a good example of where we accumulate a considerable amount of monetary value in home contents over the years,' says Churchill's Martin Scott. 'Homeowners should always try and keep tabs on how much their belongings are worth in order to get the right level of insurance cover.'

Take cover

Underinsurance, it seems, is a major problem across the country. Research from insurers Zurich reveals that one in 10 Brits has no home insurance cover at all and one in five are at risk of being underinsured because they are unsure of the value of their home contents. As Maria Donald of Zurich points out: 'Being burgled or suffering a fire or flood in your home is stressful enough, without having the extra headache of underinsuring your prized possessions.'

Clothes are not the only things we forget to protect. Saga Home Insurance says it replaces 10,000 pairs of damaged or lost glasses every year - worth £3.25 million. Many homes are now full of expensive gadgets and toys. In fact, a typical family home in the UK now contains £44,447 worth of possessions, which is more than double the amount most of us assume we have, according to More Th>n. If you are into computers, iPods, mobile phones, game consoles, cameras and entertainment systems plus the CDs and DVDs that go in them, you need to get your insurance cover right. For the record, buying between three and five new CDs a month will add about £800 a year to your home contents total. And if you have children then the need becomes greater still as today's little darlings are increasingly hard to separate from their PlayStations. Once you hear the pitter patter of tiny feet, the value of home contents typically rises by £8,772. Even the contents of today's toy-box alone could cost £850 to replace, with baby equipment and nursery furniture adding £680.

Know your value

'It is very easy to overlook the hidden assets within your home,' says Guy Knight of insurer Hiscox. 'The clue to calculating the true value of your home contents lies in your lifestyle and tastes - the way you choose to spend your cash, and the value of furniture, clothing, electrical equipment and food you are accumulating. We recommend that anyone who wants to know the true value of their possessions should calculate, room by room, how much it would cost to replace everything if they were buying it new today.'

But unlimited cover is not the answer as Allan Burns of Tesco Personal Finance explains: 'Insurers providing unlimited cover seem to be giving their customers a great deal but thousands may very well be paying way over the odds and even subsidising others. These customers are paying through the nose for what is essentially a marketing ploy, and not getting a tailored policy to suit their individual insurance needs. In reality, unless you are living in a David Beckham-style mansion crammed full of designer goods, antiques and jewellery, you aren't going to need all that cover,' he explains.

Once you have done your homework, be careful how you pay the premium. Many insurance companies are charging up to 25% more on home insurance for customers who choose to pay for their cover in monthly instalments rather than making the payment in full. This means that a customer who purchases an annual policy for £400 could be paying an additional £100 per year if they pay on a monthly basis.

And first-time homebuyers are waving goodbye to savings worth around £5million each year by falling into the age-old trap of arranging their home insurance through their mortgage provider, says Direct Line. Almost 300,000 people each year still automatically buy their cover through their mortgage lender, even though it can cost up to 30% more due to the substantial commission.

Finally, don't forget to read the small print. When burglars visited the homes of TV divas Cilla Black and Sharon Osbourne they got away with millions of pounds worth of jewels. Worse news was to follow when their insurers pointed out the gems should have been in a safe and refused to pay out. Diamonds are supposed to be forever. But just in case they're not, it's best to make sure you can replace them.