How much buildings insurance cover do I require?

The level of cover you need, or the amount of money you insure your home for will be equivalent to the cost of rebuilding your home - known as the 'sum insured' - and not its market value. The 'sum insured' is the maximum your insurer will pay out, regardless of the type of claim you may have, and it may be higher or lower than your property's value on the UK market.

The rebuild cost of your property can usually be found on your mortgage agreement, or on the deeds to your home. Alternatively, you can get a chartered surveyor to carry out a Rebuilding Cost Assessment, or use the sum insured calculator on the Association of British Insurers' website to work out the cost yourself.

How much contents insurance do I need?

To work out how much contents insurance you require, make a list of all the items and valuable possessions in each room of your home, as well as your loft/attic, garage, garden and any items stored in a shed if you want these insured as part of your contents cover.

Write down what it would cost to replace each of your possessions and calculate their total value. This will give you a good estimate of much home contents cover you need. Most insurance companies will set a maximum limit per item, usually around £1,500. If you do have items with a higher value you will need to list these separately on the policy. Most policies impose limits on the value of precious items like jewellery, antiques and works of art. Such items are best insured separately.

Remember, the sum insured is the most your insurance company will pay out if your possessions are stolen or destroyed, so make sure you don't make the mistake of underestimating the worth of all your goods as you could be left out of pocket should you make a claim.

If you redecorate your home or purchase new and expensive items, you must remember to increase the value of your insurance to cover the increased costs of replacing these items.

Extended/Additional cover

Home contents insurance policies can vary greatly with regards to what is covered as standard and what is offered as additional protection. Things such as home emergency cover, legal expenses cover and accidental damage cover may be included as standard within your home insurance policy or you may have to pay extra to have them included.

The same applies to items that that are frequently taken out of the home, such as laptops, MP3 players, cameras, sat-navs, handheld games consoles, mobile phones, sports equipment and bicycles.

Items and circumstances that are generally included as extra protection in a home contents insurance policy include:

• Cover for property damage caused by underground service pipes and cables
• Cash/ credit card protection
• Christmas cover - increased cover during the festive season to account for the gifts in the house
• Extended accidental damage cover
• Home emergency cover
• New for Old cover - claims made on a new-for-old basis (see Contents Insurance)
• Temporary alternative housing if your home becomes uninhabitable

Remember, with any home insurance policy start by checking the policy documents to see exactly what is covered. If you then decide you need more protection, you can pay extra for additional cover.