Put those presents on your policy

Another Christmas, another load of gifts - maybe it's time to update the value of your home contents insurance, says Christopher Browne

Laptops, plasma TVs, three-piece suites - almost anything goes at Christmas, so long as it's big, shiny or useful. You never know, Santa might bring you the deep-bass hi-fi system you've had your eye on for some time. But, after the merriment and the mayhem has died down, do you actually tell your insurance broker about your glossy new gifts?

Startling figures from the British Insurance Brokers Association (BIBA) show more than half of us are under-insured because we fail to advise our insurance companies about the products we pick up every year. "So your claim for the smart surround-sound unit you got in your stocking may well be refused if you didn't get extra cover for it," says Peter Staddon, BIBA's head of technical services.

Even more worrying is the fact a quarter of UK homes have no contents cover whatsoever, he says. "Though some people are on low incomes and may not be able to afford it, others forget or can't be bothered, though they will soon change their tune if they have a break-in, fire or flood and lose thousands of pounds worth of goods."

The average contents of today's home are worth just under £42,000 - 40 per cent more than they were in 1994 - according to a report by More Th>n, part of the Royal & SunAlliance insurance group. This includes everything from white goods, furniture and electrical equipment to the food we keep in the freezer.

Yet the distractions of Christmas and New Year evidently make us ever-more forgetful about updating our annual cover. "The easiest items to overlook are the cut-price sofas and settees we buy on finance in the January sales, and the electric gadgets we get for the kids. Added together, they often take your insurance well over its limit," says Staddon.

Many insurers actually increase your cover by 10 per cent to cope with the December overkill. "We spend £600 a head on Christmas presents, let alone anything else, which makes it doubly important for homeowners to regularly check their inventories," says Malcolm Tarling of the Association of British Insurers, the insurance industry's trade association.

To make it a season of goodwill rather than ill-will, the ABI and BIBA are urging brokers and insurers to send out annual contents checklists. If you don't get yours this year, you could tour your home with a jotting-pad - or go online with a new CD-rom from a company called Secure Inventories.

SI partner Mike Read stumbled on the idea when his house in Monmouth, South Wales, was part-submerged in four feet of water during local floods.

"I couldn't identify anything and it took me nine months to list all the items I owned. I thought there must be an easier way to do this so I came up with a CD-rom inventory for anyone who might find themselves in similar dire straits."

Floods and inventories notwithstanding, every insurance claim needs care and confidence. Though your company will pay the as-new price on anything up to three years old, you should make sure the product's value is index-linked and inflation-proof, too. "If you damage a carpet and fail to add in a 4 per cent rise in the recent retail price index, you'll get less than its genuine replacement cost when you claim," says Staddon.

You should also get valuations on any antiques or second-hand furniture you buy, Staddon says. And he should know. After giving his daughter a piano that cost £1,000, he called in a valuer and, to his surprise, found it was actually worth £7,000. "I may have had a great deal, but if I had valued the piano at its purchase price on my insurance and then made a claim, I would have had to find a few more thousand pounds for a replacement."

It's equally important to study the small print when insuring your home contents - particularly if you live in a high-crime area. If you don't, your claim may be thrown out, as Cilla Black discovered. Her insurers failed to pay up after a £1 million jewellery raid because her house had no locks on the ground-floor windows. If, on the other hand, you put in a police-linked alarm, it will not only make you feel safer but also give you a healthy discount on your monthly premiums.

You can also cover your portable items, such like digital cameras and mountain bikes. "Travelling between European countries has become so easy that we tend to take more items than before. Including them in your home policy will give good back-up for your travel insurance," says Staddon.

Making that Christmas list may not be such a bad idea after all.

Order a home contents CD-rom (£29.50) or download facility (£32) on 01600 775 472 or www.secureinventories.com