Home insurance - one of the most important types of insurance policy you will ever own - is not actually a legal requirement. However, as most mortgage lenders now require property owners to take out buildings insurance when they buy a new home, buildings insurance at least is becoming a necessity; and let’s face it, few of us can buy a home without a mortgage.

Contents insurance, on the other hand, is not necessary to obtain a mortgage. There is no piece of law out there stipulating the requirement for this kind of insurance; however, it seems a little silly to insure the building, but not all the treasured contents inside of it. The contents, as well as the building, are just as likely to get damaged from flooding and they can also get stolen; your home cannot.

Contents insurance is set in a number of ways. Depending on the value of your contents, you can choose the standard cover, which is usually between £30,000 and £50,000. However, if your contents are of a greater value you can go for a ‘sum assured’ policy. This involves itemising and working out how much it would cost to replace all the non-fixed items in your home. This takes some time, but is worth doing if your contents are of considerable value. If you underinsure your contents, i.e. you don’t include everything or you get the calculations wrong or opt for a standard policy with minimal cover, you will lose out and receive less insurance when you make a claim. It is essential therefore to work out how much it would cost to replace goods on a new-for-old basis.

If you own individual items of particular value, such as collectors' coins, jewellery or high-value art, it is absolutely essential to have home contents insurance. Depending on the value of specific items, you will either need to list them separately on the contents policy, or if they are of extreme value, you will need to seek out specialist insurance. Legal and General offer executive contents insurance for high value items. This cover is bespoke and thus tailored to your individual needs.

It is up to you to keep on top of any changes in value to specific, named, high-value items such as your collectors’ coins. If the value goes up or down, your insurance may be insufficient or become null and void.