Paying the price for being under-insured

Nearly half of Britons are undervaluing the contents of their property, leaving them financially exposed if they have to claim on their home insurance.

Around 26 per cent have under-insured their clothes, furniture, electrical goods and other possessions by an average of 20,000, according to insurer Direct Line. A further 20 per cent of households have no home contents cover at all.

With this group having possessions valued at an average of 14,000. When calculating how much home insurance cover they need, people often only think in terms of the value of items that may be stolen. But it is important to plan for the worst case scenario, under which all your possessions are destroyed.

Direct Line estimates the typical household owns 4,000 of furniture, 3,000 of electrical goods, 2,000 of white goods and nearly 2,000 of clothes.