Knowing how much to insure your belongings for is not always an easy question to answer. Insurance is a tricky area, because if you over-insure your belongings, you will be spending way too much money on premiums that would not be worth the cost in the end if you never have a claim. However, if you under insure your belongings, and then there is a fire or a flood that destroys everything in your home, your insurance will not cover the cost of replacement of all the items you have lost and you will then have to pay for them out of pocket. If you are wondering, “How much should I insure my contents for?” Take a look at this guide before you buy more insurance.

How much should I insure my contents for if I own my home?

When you own your own home, a number of things will normally be covered by your standard building insurance that you may not need to insure with a separate contents insurance plan. It is always best to ask before you buy, meaning you should find out first what your standing insurance already covers. However, it is generally safe to assume that your standard homeowner’s insurance will cover things that are necessary to the house to function, such as the heating source, the water tank, wiring, plumbing, and electricity.

Other things that may already be covered by building insurance include structures on the property, like garages or sheds. Generally, nothing else that is in or on the property is going to be covered by a standard building insurance plan.

Once you determine what your existing insurance covers, it is time to ask your insurance agent, “How much should I insure my contents for?” He or she will likely tell you to make a detailed list of everything in your home that you would want to replace if it were damaged, and then add up the total value.

How much should I insure my contents for if I rent my home?

When you rent your home, you will generally not already have a standing insurance policy to cover anything that you own in your home. Your landlord will be covered if there is any damage to the property or the buildings on it, but your personal belongings are not covered in any way.

If you rent your home from a landlord, what you will need to do is to add up the cost of repair or replacement of everything you own. Make a very detailed list of your belongings, and make sure to note what the item cost when you purchased it, and what it is worth today. Keep in mind that some items gain value over time, such as rare collectables, and other items depreciate in value very rapidly, like computers or electronics.

The last thing to remember when purchasing contents insurance for your belongings in a rented home is not to forget to include items that already are in the home, but that your landlord would expect you to replace if they were damaged.