What is underinsurance?

As a homeowner, you should know roughly the value of your building and its contents every year.

If your estimates are too low, you could find yourself underinsured.

For example, if your contents are worth £40,000 but you only value them at £20,000 on your policy, you are 50% underinsured. If you were to make a claim, some insurers would only pay 50% of your claim. This means you would have to pay the rest yourself.

Even if the amount you claim is less than the total sum insured, you won't have paid the right premium for the cover you need. So your claims payment may still be reduced.

Having the right level of cover is almost as important as the cover itself. It means if you ever need to make a claim, you won't find yourself at a loss.

Some insurers will pay up to the amount you are insured for. This may still leave you out of pocket. Other insurers offer an unlimited sum insured, or cover you for the rebuild cost of your property. This means that you don't have to worry about being underinsured.

How can you work out if you're underinsured?

To see if you are underinsured, first work out how much your belongings are worth. You should do this regularly, in case things have changed in value or you have bought something new.

You should include everything you would need to replace if you had a total loss. For example, if all your belongings were destroyed in a house fire.

Then, check your value against your current policy to see what the gap is. If there is a big difference, it may be worth upping the amount you are insured for.

It's important to check all your policy limits, as there may be things that are insured for a lower limit. If you have home insurance with Lloyds Bank, you can check your policy online and see what's covered. 

Ways to avoid being underinsured

  • Check the amount you are insured for. If your policy has a single item or total claim limit, check that these are still right for you. 
  • Add up the value of your contents room by room. Don’t forget your attic, basement and garage. 
  • Work out the cost to replace the item now, not what you paid for it. Look up the most recent price of the item to understand this. 
  • Include any new high value items or heirlooms you have. You may need to list these separately on your policy. 
  • Think about items you want to cover when you're out and about. Are they protected under your existing cover or do you need extra cover? 
  • If you have home insurance with Lloyds Bank, you can update your policy at any point. There's no need to wait to be protected. Some providers may charge a fee to make a change, but we let you make changes with no admin fees.

Commonly underinsured items

Forgotten items

The average price for new windows is £500 to £3,200 per window.1

Top tip: 

Keep receipts for all your fittings, fixtures and accessories. Add it to your room totals each year.


A loft conversion can add 10-20% to the value of your home.2

Top tip:

Keep a note of your recent building additions. This will sit within the rebuild cost of your insurance.

Family situation

Four in ten British kids have their own tablet by age six.3

Top tip:

The value of your children's belongings will grow as they do. Don't forget their toys and electricals.

Falling values

Global art sales fell by 5% in 2019.4

Top tip:

Have antiques, heirlooms and jewellery valued every two years. Check your insurance still covers the item’s value.

Rising values

The inflation rate for consumer prices rose to 1.8% in January 2020.5  This includes clothing, electricals and homeware.

Top tip:

Check single limit items are still covered, should you need to repair or replace them. This includes items such as TVs, tools or clothing.


Hidden value

A man's wardrobe contents could be worth over £3,000.6

A kitchen's kit could be worth over £3,000.

Top tip:

Some of your most valuable items are in your drawers and cupboards. Do not forget to include them.

  • 1Forgotten items: Everest, October 2020, https://www.everest.co.uk/double-glazing-windows/new-windows-cost/#:~:text=How%20much%20do%20new%20windows%20cost%3F%20(recap),being%20replaced%20in%20the%20property

    2Renovations: Roof Windows 4 You, November 2019, https://www.roofwindows4you.co.uk/knowledge-hub/dont-move-improve-how-much-value-does-a-loft-conversion-add/

    3Family situation: YouGov, March 2020, https://yougov.co.uk/topics/education/articles-reports/2020/03/13/what-age-do-kids-get-phones-tablet-laptops-

    Apple product prices as at 29/10/2020, iPhone 12 £799.00. iPad Air £579.00 https://www.apple.com/uk/

    4Falling values: Artlyst, March 2020, https://www.artsy.net/article/artsy-editorial-art-market-2020-report

    5Rising values: Office for National Statistics, January 2020, https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/january2020

    6Hidden value: 

    Wardrobe costs based on the following items available from johnlewis.com, prices correct as at 29/10/2020.

    Barbour Merino Cashmere Tartan Scarf, Classic Green/Blue, £39.95; Polo Ralph Lauren Wool Beanie Hat, Piper Navy, £39.00; Barbour Waxed Cotton Baseball Cap, One Size, Olive/Seasweed, £27.95; Reiss Roman Zip Neck Cotton Polo Shirt, £76.00; Barbour Tartan Pique Polo Shirt, £44.95; Polo Ralph Lauren Custom Slim Fit Mesh Polo Shirt, Haven Green, £68.00; Levi’s 501 Original Straight Jeans, One Wash, £56.00; Levi’s Slim Jeans, £68.00.

    Original Penguin Sticker Pete Cotton Blend Joggers, Rain Heather, £48.00; Kin Bengaline Wool Slim Fit Suit Trousers, Charcoal, £80.00; John Lewis & Partners Linen Regular Fit Suit Trousers, Navy, £69.00; John Lewis & Partners Linen Regular Fit Suit Jacket, Indigo Blue, £130.00; John Lewis & Partners Organic Cotton Trunks, Pack of 3, Black, £22.00; Paul Smith Plain Stripe Trunks, Pack of 3, Multi/White/Black, £36.00; Paul Smith Signature Stripe Socks Gift Set, Pack of 3, Multi, £45.00.

    Happy Socks Classic Socks Gift Box, One Size, Pack of 4, Multi, £34.95; John Lewis & Partners Organic Cotton Rich Heel and Toe Socks, Pack of 5, Black, £12.00; Kin Wool Blend Epsom Coat, Navy, £175.00; Kin Shower Resistant Short Puffer Jacket, Red Wine, £125.00; Kin Wool Rich Hooded Parka Coat, Navy, £175.00; John Lewis & Partners Cashmere Crew Neck Jumper, Yellow, £99.00; Barbour Fogle Wilderness Colliford Wool Knit, Navy, £119.00; Polo Ralph Lauren Pima Cotton Jumper, Hunter Navy, £98.00.

    GANT Cable Knit Jumper, Dark Navy, £88.00; Polo Ralph Lauren Regular Fit Shirt, Newport Navy, £85.00; Polo Ralph Lauren Long Sleeve Slim Fit Denim Shirt, Blue, £109.00; Barbour Wetheram Tartan Shirt, Seaweed Green, £51.96; Carhartt WIP Thorne Houndstooth Shirt, Dark Navy/Husky, £90.00; Polo Ralph Lauren Short Sleeve Custom Fit Crew Neck T-Shirt, New Heather Grey, £49.00; Levi’s Original T-Shirt, White, £18.00; Fred Perry Ringer Crew Neck T-Shirt, Black, £40.00; Timberland Stormbuck Waterproof Plain Toe Oxford Shoes, Dark Brown, £120.00.

    Ted Baker Thwally Leather Trainers, White, £109.00; The North Face Easy Short Sleeve T-Shirt, Black, £25.00; Polo Ralph Lauren Striped T-Shirt, Boat Navy/Garden Pink, £59.00; Fjällräven Logo T-Shirt, Ochre, £35.00; Jaeger Long Sleeve Breton Stripe T-Shirt, Navy, £49.00; Carhartt WIP Loony Script T-Shirt, White, £35.00; John Lewis & Partners Somersall Suede Loafers, Tobacco, £80.00; UGG Biltmore Waterproof Chelsea Boots, Military Sand, £130.00; Barbour Seaton Mariner T-Shirt, GY52 Grey, £34.95; BOSS Saturn Trainers, 001 Black, £159.00.

    TOTAL = £3054.71

    Kitchen costs based on the following items available from johnlewis.com, prices correct as at 29/10/2020.

    Bosch KSV36NW3PG Freestanding Tall Larder Fridge, A ++ Energy Rating, 60cm Wide, White, £649.00; John Lewis & Partners Classic Pan Set, 5 Piece, £170.00; John Lewis & Partners Non-Stick Carbon Steel Roaster, £11.00; Eaziglide Neverstick Non-Stick Baking Tray, £22.00; John Lewis & Partners Kitchen Utensils, Set of 6, Black, £35.00; Joseph Joseph Nest Lock Airtight Storage Containers, Set of 5, Assorted, £35.00.

    Masterclass EdgeKeeper Filled Wooden Knife Block with Stainless Steel Knives, 5 Piece, £100.00; John Lewis & Partners Large Classic Chopping Board, FSC-Certified (Oak Wood), L42cm, £30.00; Joseph Joseph Editions Mixing Bowls & Measuring Cups Nest Set, 9 Pieces, Sky, £50.00; Salter Evo Kitchen Scale, 6kg, £20.00; John Lewis & Partners Butcher’s Stripe Double Oven Glove, Dark Blue, £18.00; John Lewis & Partners Butcher’s Stripe Tea Towels, Pack of 3, Dark Blue, £12.00; Magimix Power Blender, Satin, £199.00; John Lewis & Partners JLK093 1.7L Kettle, Silver, £25.00.

    Joseph Joseph Editions Wash and Drain Washing Up Bowl, Sky Blue, £32.00; John Lewis & Partners Simplicity 2-Slice Toaster, Stainless Steel, £45.00; Panasonic NN-E28JBMBPQ Microwave Oven, Black, £79.00; Nespresso Essenza Mini Coffee Machine, by KRUPS, Black, £89.99; Denby Imperial Blue Dinnerware Set, 12 Piece, £172.00; Royal Doulton 1815 Tapas Mugs, Assorted Brights, Set of 4, £31.00; John Lewis & Partners Arc Cutlery Set, 18 Piece/6 Place Settings, £100.00; John Lewis & Partners 2 Section Recycling Bin, 60L, Silver, £85.00; Le Creuset 3-Play Stainless Steel Non-Stick Frying Pans, Set of 2, £195.00.

    Le Creuset Stoneware Deep Square Oven Dish, 23cm, Deep Teal, £29.00; OXO Good Grips Salt and Pepper Mill Grinders, Set of 2, £45.00; Joseph Joseph 2-In-1 Measuring Jug, 1L, £15.00; Eaziglide Neverstick2 Pot 3-Tier Steamer Set, £115.00; Le Creuset 3-Ply Stainless Steel, Non-Stick Wok & Lid, 30cm, £139.00; Le Creuset Stoneware Square Oven Dish, Set of 2, Black, £57.00; Stoves Sterling 600G Freestanding Gas Cooker, £649.00; John Lewis & Partners Classic Wood Roll Top Bread Bin, W40cm, £38.00.

    TOTAL = £3291.99

What happens if you're underinsured?

If you take out a lower policy than you need, it can affect how much you can claim for. You may only get a percentage of the money you need to replace or repair your home and contents. 

You will then need to pay the remaining amount yourself. 

Underinsured buildings

Often, homeowners will insure their home for what they originally paid for it. But, the cost to rebuild a house can be much higher.

Make sure your policy covers the cost of rebuilding your home from scratch. This includes the price for labour and materials. If you’ve recently bought your house, you can find this in your mortgage documents. If it’s been awhile since you bought the house, these documents might be out of date. Try using a cost calculator to work this out.

If you have renovated your home, you will need to recalculate the rebuild costs. Get in touch with your insurer, and, if in doubt, hire a surveyor to get an accurate valuation.

Underinsured contents

It's important to keep your contents up to date with any new items you buy. If you have invested in a new wardrobe, or splashed out on an expensive pair of shoes, you'll need to make sure they are covered.

If you were to lose all your items to fire or flooding, but only insured some of your contents, you could be out of pocket.

How to value your items

Whether you live in a one bedroom flat or a family home, chances are you have a lot of items in your home. Here are some tips for valuing your contents accurately.

List each item to be insured

Go from room to room listing every item you would want to be replaced if it was damaged or destroyed. This includes:

  • Curtains
  • Bedding
  • Clothing
  • Tableware
  • Kitchen utensils

Check the value online

If you don’t have copies of your receipts or can’t remember what you paid for a certain item, then check online. Even if you can’t find the exact item, you should be able to see what similar items sell for.

This can be useful for items that may be more expensive to buy now than when you first bought them. 

Revalue regularly

When your policy is due for renewal, it is a good idea to revalue any items which may have gone up in value. This could include:

Cover your items away from home

If you travel with high value items, it may be worth taking out additional Away from home cover. This can protect your:

  • Laptops
  • Cameras
  • Phones

Limits, terms and exclusion apply to all insurance policies. So, it's important to check how much they are covered for and what you need to do to take care of them when you are out and about.

Find out more about home insurance

Find out more Learn more about home insurance.

Value your contents

The Association of British Insurers offers a useful checklist here to help you add up the value of your contents in each room.

View the checklist About how to check the value of your contents.