We get it—when you're juggling a busy household or career, sorting out contents insurance isn't exactly at the top of your fun list. But here’s the real talk: if disaster strikes and your stuff gets damaged or stolen, you'll want to know you're properly protected. The key? Getting your sum insured right. This is the maximum amount your insurer agrees to pay if you need to make a claim. Just keep in mind that the actual payout depends on your policy terms.
So how do you figure out exactly how much coverage you need? No stress—working out the right sum insured doesn’t have to be a brain-melter.
Let’s break it down and make sure you’re covered without emptying your wallet.
Step 1: Take an inventory of your stuff
Taking an inventory of your belongings is easier than you might think. The first thing you’ll want to do is take a good look around your home. Walk through each room and list everything you own—from furniture and gadgets to those small items that quickly add up. As you create your list, include everything from essential furniture to smaller items, such as:
Electronics: Laptops, phones, and TVs
Furniture: Couches, dining tables, beds
Kitchen appliances: Fridges, dishwashers, microwaves
Clothing & Personal Items: Jewellery, clothes, shoes
Outdoor Gear: BBQs, bikes, outdoor furniture
As you go, take note of any high-value items like your jewellery or artwork—these may need special mention in your policy. Curious about mastering contents insurance? Dive into our 'Further Reading' section below.
Step 2: Estimate the replacement cost
Now that you've got your list of belongings, the next step is to figure out how much it would cost to replace them. Here’s a quick tip: focus on the replacement cost, not the current market value.
For example, if your couch is a bit worn but would cost $2,000 to replace, use that amount. You don’t have to do this manually. Many insurers have online calculators that help you estimate the cost of replacing everything in your home. If you're unsure about specific items, like electronics or appliances, look up their replacement costs online.
Step 3: Use Quashed to compare and get the right coverage
Now that you know how much it would cost to replace your belongings, it’s time to compare policies and find the right coverage.
That’s where Quashed comes in. At Quashed, we make it easy to find the right contents insurance for you. Use Quashed to compare contents insurance policies from different providers.
Tailoring coverage to your unique situation is simple—whether you need higher coverage for expensive gadgets or a standard plan that fits your budget, Quashed makes the comparison process quick and hassle-free.
Ready to protect your belongings? Explore our 'Further Reading' section below.
Step 4: Keep your sum insured updated
It’s tempting to set your sum insured once and forget about it. Here’s the thing: life changes, and so do your belongings.
Have you bought a new sofa, upgraded your kitchen appliances, or added bikes for the family? If your contents grow over time, you’ll need to update your coverage accordingly.
Step 5: Balance coverage and cost
While keeping your sum insured updated is crucial, it's also important to strike the right balance between coverage and cost. It’s easy to get caught up in insuring everything to the max, but you also want to ensure the premium fits your budget. Insuring everything at replacement value can increase your premium, but underinsuring could leave you vulnerable if something happens.
Finding the right balance is key. You want to make sure your most valuable items are properly covered without overspending. Quashed allows you to tailor your coverage by comparing different policies, so you can make sure you’re getting the best bang for your buck.
Looking for more info? Check out our 'Further Reading' section below.
Why your contents insurance might need a second look
Finding the right balance between coverage and cost isn’t just about saving money—it’s about ensuring you’re properly protected.
When it comes to contents insurance, there’s no one-size-fits-all. The amount you should insure depends on your personal situation and the value of your belongings. Getting the sum insured wrong could leave you underinsured with a big gap in coverage or overpaying for unnecessary insurance. That’s why it’s important to take a few minutes each year to review your contents insurance.
With Quashed, you can easily find a policy that matches your needs, helping you stay protected and in control.
Hypothetical case study: Sarah’s steps to setting the right sum insured
Let’s take a look at how Sarah, a busy professional in Auckland, applied these steps to ensure her contents insurance matches her needs.
Sarah, a 38-year-old professional living in Auckland, recently moved into a new apartment. She's got a couple of young kids, a new job, and a growing collection of tech gadgets, including a brand-new laptop, smartphone, and tablet. Sarah wants to make sure everything is properly insured, so she decides to review her contents insurance.
Step 1: Inventory of belongings
Sarah spends an afternoon going through her apartment and listing all the valuable items.
Electronics: Laptop ($2,000), smartphone ($1,000), tablet ($800)
Furniture: Sofa, dining table, bunk beds
Kitchen items: Fridge, microwave, washing machine
Valuables: Family heirloom jewellery and some high-end art pieces (valued at approximately $2,000)
Step 2: Estimating replacement costs
Sarah adds up the replacement costs for everything she wants insured—based on current market prices, the total is $15,000. After checking online prices for her high-value items, Sarah estimates the total value of her belongings at $17,000.
Step 3: Use Quashed
Sarah then heads to Quashed to compare different contents insurance policies. Using Quashed’s easy-to-use comparison tool, she finds the following options:
Policy 1: $250/year, covering everything with a $500 excess (amount paid before claims).
Policy 2: $280/year, includes accidental damage but with a higher excess of $1,000.
Policy 3: $230/year, only covers standard items with a lower excess.
After reviewing her needs and preferences, Sarah chooses Policy 2, as it offers full coverage (including accidental damage) for only $30 more annually.
Step 4: Regular review
Sarah sets a reminder to review her contents insurance every year. She’ll update her sum insured if she buys new tech or furniture and will also keep an eye on changing values as her kids’ belongings grow.
Sort out your insurance today, the easy way
Skip the hassle of searching multiple websites.
With Quashed, you can compare insurance options in minutes.
Join over 45,000 Kiwis who have already made informed decisions about their cover.
Further reading
Here are some useful reads:
Complete Guide to Contents Insurance: Learn the essentials of protecting your belongings.
How to Lower Your Contents Insurance Premium: Smart ways to cut costs without losing cover.
How Much Does Contents Insurance Cost? : Key factors that affect your premium.
Contents Insurance Tips for Kiwi Seniors: Helpful info tailored for older Kiwis.
Is Contents Insurance Worth It for Renters?: Should renters get insured?
FAQs
What is the sum insured for contents?
The sum insured is the maximum amount your insurance will pay to replace your belongings in case of damage, theft, or loss. It’s essential to set an accurate sum insured, ensuring it covers the total replacement cost of your items—without being too low (which could leave you underinsured), or too high (which could lead to overpaying for premiums).
How do I choose a sum insured?
To determine the right sum insured, start by estimating the total value of your belongings. Begin by taking an inventory of everything you own—electronics, furniture, and valuable items like jewellery or artwork. Once you’ve calculated the replacement costs, use this total as your sum insured. For older items, consider their replacement costs while factoring in depreciation.
How do you calculate your sum insured?
To calculate your sum insured, list all your belongings, including electronics, furniture, clothing, and valuables. Estimate the replacement cost for each item. You can use online calculators to simplify the process and ensure accurate estimates.
What happens if my contents sum insured is too low?
If your contents sum insured is too low, you could be left short-changed when it's time to make a claim. If you don’t have enough cover, you’ll end up paying out of pocket to replace or repair any damaged or stolen items. In short, you won’t get the full payout you need to replace your stuff with like-for-like items. It’s like skimping on your grocery list and then realising you don’t have enough food to feed the family. The trick is to get your sum insured right, so you’re covered for the full value of your contents.
How often should I review and update my sum insured?
It’s a good idea to review and update your contents sum insured at least once a year. However, there are times when you might want to do it more often—such as if you've made a big purchase or acquired a whole new wardrobe. Things like that can bump up the value of your contents, so you need to make sure you’ve got enough cover. Keep it fresh and up-to-date to avoid being caught out when it matters most.
Why should renters consider contents insurance in New Zealand?
Contents insurance protects your belongings from theft, fire, or damage, ensuring you're not left out of pocket. While landlords cover the building, your personal items aren’t included. Interested in learning more? Check out our guide: Is Contents Insurance Worth It for Renters?
