This is a tricky one. we used the website of one of Britain's leading insurers recently and got a house quotation where the insurer quoted a price with the assumption that our contents were worth £30,000.

It didn’t state how they came to that conclusion.

The trouble is, if we had bought a policy from that quote and later make a claim, the loss adjuster would check our house to see how much he thinks our contents SHOULD have been insured for. And of course he doesn’t make ANY assumptions.

So, let’s say the Loss Adjuster thinks we should have insured our contents for £50,000. Then they figure out how much we are under-insured for. In this case it’s 40%.

Then they take the total claim value and deduct that 40% off. So if my claim was for £5,000, they only pay £3,000. I think everyone will agree this is quite neat, and of course it is only right. It’s just that, for the consumer, the way these things are communicated sometimes seems more like a deliberate pitfall rather than a cost-management feature!

Of course, not all insurers are lax in communicating this but irrespective of who you are getting a quote for, it might be wise to make absolutely certain that you have enough cover for your needs!