How to Value House Contents
Establishing the purpose of valuation is crucial before you begin
23/05/2023
Valuing house contents can be a laborious task, especially when you don't know exactly what you have or if the items are unique. Establishing the purpose of valuation is crucial before you begin. An insurance valuation is very different to a probate valuation.
Insurance valuation of house contents:
A valuation for insurance purposes is required to determine the cost of replacing your personal possessions if they’re stolen, damaged or destroyed after an incident like a fire or a flood. This valuation must be accurate, or you run the risk of being underinsured, where the amount the insurance company pays out will not cover what has been lost, or indeed, you may be over-insured, and paying too much for your insurance cover.
Your insurance company will request an estimated total value of all your possessions, which should include all personal belongings, as well as fixtures that are not part of the building. Although it is unlikely a burglary will result in the theft of your sofas or dining table, a fire or flood would certainly pose a risk to these items.
We suggest tackling one room at a time, make an itemised list of each item in the room and roughly how much you estimate it would cost to replace the item today (receipts are useful, whilst internet searches can provide an idea too). A spreadsheet can also make it much easier for you to keep track of running totals. This can be quite straightforward for things like beds, linen, and clothing, but if you have any art, antiques, or other items of value, we highly recommend obtaining a professional valuation in respect of those possessions.
Many insurance companies require items over a certain monetary value to be listed separately, this threshold is usually between £1,000 and £2,000 per individual item, and failure to do so could result in the insurance company refusing to pay out for the item in the unfortunate event of its loss or damage. Jewellery, watches, art, antiques, and collectables all fluctuate in value, so it is important to have this valuation updated on a regular basis. Here at Dawsons, we ensure that our clients receive a detailed report accompanied by images of each item valued, which can be submitted directly to the insurance company. We find this helpful for clients to keep track of their most valuable treasures in one concise document.
Probate valuation of house contents:
A valuation for the purposes of probate is required when someone passes away. It is an estimated current market value of all the possessions within their home that will form part of their estate and can be subject to inheritance tax. It is imperative that this valuation is accurate, if HMRC were to question any of these figures and they were found to be inaccurate, the estate and its executor could be faced with significant penalties.
Items like a motor vehicle can be valued based on current prices of comparable makes and models on websites like Autotrader, whilst electrical goods such as washing machines, dryers, and fridges can be valued on sites like eBay, Gumtree or Facebook Marketplace. Some items will be so low in value, it is worth bundling them together – items like crockery and kitchenware, or bedding and towels.
The danger of estimating values for probate increases exponentially if you are not sure what an item is. The deceased may have purchased a set of Royal Copenhagen dinner plates, or perhaps they found an antique pocket watch they liked at a charity shop – which could turn out to be something truly special. Indeed, our Valuers often discover sterling silver cutlery in the drawer amongst every day stainless steel items…
We would again advise sorting through one room at a time as the most sensible approach. List items individually, only bundle when you are certain the items included are all worthless or low in value, and finally, put anything you are not sure about to one side. Once you have done this, we recommend contacting a specialist probate valuer so that they can provide an accurate valuation.
Upon instructing Dawsons, one of our friendly team will arrange for an expert valuer to visit your property to carry out a valuation. They will help you to identify all items of value and provide an HMRC compliant report suitable for probate and inheritance tax calculation purposes.
read more:
What's the Best Way to Sell the Contents of a House?
How Much Are My Antiques Worth?
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