Contents Insurance UK: What Is Covered, Limits and How to Value Your Possessions

What counts as contents

Contents are the movable items in your home: the things you would take with you if you moved house. This includes furniture, beds and soft furnishings, carpets and rugs that are not fitted, curtains and blinds, televisions and computers, kitchen appliances that are not built in, clothing, books, food in the freezer, and personal belongings down to ornaments and the contents of cupboards.

The dividing line with buildings insurance is permanence. A fitted kitchen or fitted wardrobe is part of the structure and falls under buildings cover, while a free-standing wardrobe or a kettle is contents. Carpets are an area where policies differ, so it is worth checking whether they sit under contents or buildings in a given wording.

Contents cover typically responds to the same family of insured perils as buildings: fire, smoke, storm, flood, escape of water, theft, malicious damage and impact. Many policies also offer accidental damage as an option, covering events such as spilling paint on a sofa or putting a games controller through a television screen.

Single-article and category limits

Two limits commonly catch people out. The first is the single-article limit: the most the policy will pay for any one item unless it has been specified separately. This is frequently set somewhere between 1,500 and 2,500 pounds. A watch, engagement ring, laptop or designer handbag worth more than that limit must be listed individually, with its value declared, or a claim will be capped.

The second is the category limit, a sub-limit that caps the total payout for a class of items regardless of your overall sum insured. Jewellery and watches as a whole, cash kept in the home, bicycles, and contents in outbuildings are common examples. You could have a generous overall sum insured yet still find jewellery capped at a fraction of it.

Valuables you carry outside the home, such as a phone, jewellery or a bike, are usually only covered away from the property if you add personal possessions cover. Without it, a phone stolen in the street is generally not covered, even though it would be covered if stolen from inside your home.

New-for-old versus indemnity

The settlement basis determines how much you receive. A new-for-old policy replaces a lost or damaged item with an equivalent new one at today's prices, with no deduction for age or wear. This is the more common and more valuable basis and is what most standard contents policies provide for the bulk of household goods.

An indemnity basis instead pays the current second-hand value, deducting for wear and tear and depreciation. Some policies apply indemnity terms to specific categories such as clothing and linen even where everything else is new-for-old, so it is worth checking the basis applied to each class of goods.

Where a claim is settled new-for-old, the insurer may offer a replacement, a voucher, a repair or a cash payment. Reading how the policy chooses to settle, and any preferred-supplier arrangements, helps set expectations before a claim arises.

How to value your contents accurately

Setting the sum insured too low risks the same proportionate reduction (the average clause) that applies to buildings cover, so an accurate total matters. The most reliable method is a room-by-room inventory: walk through each room and list everything, estimating the cost to replace it new rather than what you originally paid or what it is worth second-hand.

It is easy to under-count. Wardrobes full of clothing, the contents of the loft and garage, kitchenware, books, and the cumulative value of electronics across a household add up quickly. Photographing rooms and keeping receipts or valuations for higher-value items both speeds up valuation and supports a future claim.

Some insurers offer bedroom-rated or unlimited contents cover, where the sum insured is set by the number of bedrooms rather than a declared figure, removing the under-insurance risk for typical households. For homes with significant valuables, a declared sum insured with specified high-value items is usually more appropriate, and professional valuations help substantiate jewellery, watches and art.

Making a contents claim

After a loss, report theft or malicious damage to the police and obtain a crime reference number, as most policies require this for theft claims. Document the loss with photographs, gather any receipts, valuations, instruction manuals or bank statements that prove ownership and value, and notify the insurer promptly because delay can prejudice a claim.

The insurer will assess the claim against your sum insured, the single-article and category limits, the settlement basis, and the excess. For larger claims a loss adjuster may be appointed. Keep damaged items where it is safe to do so until told otherwise, as the insurer may wish to inspect them.

If a claim is declined or you believe it has been underpaid, complain to the insurer in writing and request a final response. Under FCA rules this should usually arrive within eight weeks. If you remain dissatisfied, the Financial Ombudsman Service can review the dispute free of charge and reach a decision that binds the insurer where you accept it.

Frequently asked questions

Is contents insurance compulsory?

No. Unlike buildings cover, no mortgage lender requires it and there is no legal duty to hold it. It is optional, but it protects belongings that a buildings policy does not cover.

What is a single-article limit?

It is the maximum a policy will pay for any one item unless that item is specified separately. It is often set between roughly 1,500 and 2,500 pounds, so higher-value items must be listed individually to be fully covered.

Are my belongings covered when I take them outside the home?

Only if you add personal possessions cover. Standard contents insurance generally covers items inside the home, so a phone or bike taken out and about needs the away-from-home extension to be covered.

What is the difference between new-for-old and indemnity cover?

New-for-old replaces items with equivalent new ones at current prices with no deduction for wear. Indemnity pays the current second-hand value, deducting for age and wear. New-for-old is the more valuable basis.

How do I work out my contents sum insured?

Do a room-by-room inventory and estimate the cost to replace everything as new, including the loft, garage and wardrobes. Some insurers offer bedroom-rated or unlimited cover that removes the need for a precise figure.

Do I need to keep receipts to claim?

Receipts, valuations and photographs all help prove ownership and value and speed up a claim, especially for higher-value items. For theft you will also usually need a police crime reference number.