Get full value out of your contents insurance

The price is wrong: the value of antiques like these auctioned at Bonhams must be monitored, since index-linking may not keep up with the fluctuations of the market

THE good news is that Auntie Sadie's oak furniture has shot up in value over the past three years, by 20 per cent. The bad news is that you only find this out when your heirlooms are stolen. Worse still, because, you do not have an up-to-date valuation, the insurers are quibbling about the claim.

The nightmare really starts, however, when you find out you were not covered for the new, higher value of your treasures.

Regularly updated valuations are crucial to avoid this sort of scrape. And the higher the value of the possessions, the more important it becomes to have documentary and photographic evidence. Half the battle is to have an accurate record to help the police track down stolen goods and provide a basis for an insurance claim. Home Inventory Service in Worcester will record up to 75 items and their details on film for pounds 325 in a single visit, and store the inventory for pounds 5 a year.

But a record is no substitute for insurance, which should also be regularly reviewed. Index-linking of belongings according to inflation may not be enough, according to Bonhams. The market price of antiques, paintings and other collectibles fluctuates according to demand.

Contemporary ceramics, for example, have consistently beaten inflation in the past three years, appreciating by 30 per cent. After a few years some items may become 50 per cent under-insured. Conversely, other items that depreciated with the slump may now be over-insured. Some British and Impressionist pictures are now worth 40 to 50 per cent less than in the late 1980s.

Valuation for insurance is not cheap. Christie's charges pounds 600 to pounds 800 for a home visit to inspect and put a value on belongings. Gurr Johns, the specialist valuer, charges from pounds 600 or pounds 700. Other services cost, typically, 1 per cent of the value of insured items. Bonhams has launched a scheme in which pounds 600 is charged for the initial visit, and pounds 150 a year for the next three updates.

Bonhams recommends Valueplan for house contents of pounds 60,000 or more. Valueplan covers everything in the house - soft furnishings, curtains, electrical goods - as well as antiques and other valuables. The latter are listed separately and photographed.

Clients are then given the choice of insuring their goods at retail or auction values. As the latter are normally lower than retail, premium savings can be made.

Insurance industry experts such as Peter Farmer of the AA acknowledge this scheme to be good value. Loss adjusters and insurers accept current valuation documents. This can lead to discounts among brokers specialising in this type of contents insurance.

Valuations sometimes provide surprises. When Diddi Edmonds, a valuer, went to appraise the contents of one north London home, she stumbled across a painting by Jan Lievens, sometimes dubbed "the other Rembrandt". The owners believed the picture was worth pounds 3,000. It eventually sold for pounds 580,000.