Don't forget to look in the wardrobe when valuing your home contents

It's not just the furniture and expensive gadgets that need to be included on insurance policies, warns Chiara Cavaglieri

With household budgets overstretched, scrimping on insurance may be tempting, but having inadequate cover means you could be caught short if the worst happens. One of the most common mistakes is to underinsure household contents. Insurers recommend regular evaluations of home contents, about once every six months. The value of all your contents, new and old, may come as a bit of a shock if you haven't checked for some time.

"Being underinsured for home contents is an easy mistake to make. Many people underestimate the value of their belongings and only realise their true value once it's too late," says Debra Williams from Tescocompare.com.

When assessing how much cover you need, draw up a list of rooms and the items inside each room. It's not just about furniture; curtains, carpets, ornaments and bedding are often overlooked and can add up to a considerable amount if they had to be replaced. Create an inventory of items, including collections of cheaper items such as books and films, and update it as often as you can. Clothing is another item often forgotten, so include the cost of replacing the entire wardrobe. That old suit may not look like much, but it could leave dent in your wallet if you had to replace it.

Check the upper limit on valuables such as jewellery and take out separate cover if your items fall outside this limit. Remember that when precious metal prices rise it will affect the cost of replacing any relevant pieces you own. During the recession, for instance, the price of gold has reached record levels, meaning that many people own jewellery that is now being severely undersold on their policy.

Newlyweds are particularly at risk if they fail to tell their insurer about new belongings after their big day. The average increase in value following a wedding is nearly £12,000, according to a new study by specialist insurer Hiscox. Despite this, Hiscox said, more than half of couples married in the past five years have not reviewed their cover or informed their insurers about the boost in contents. Few couples have anything other than dress fittings and seating plans on their mind before a wedding, but cover for loss or theft of gifts and rings is important. "The accumulated value of these items can be huge, so it's worth having a quick look at your contents policy to see if your insurer includes immediate cover for new items," says Austyn Tusler, a household insurance expert at Hiscox.

The run-up to Christmas, which seems to get earlier each year, is another vulnerable time with expensive gifts presenting an easy target for burglars. Always check that your existing policy offers extra cover for the total cost of any stolen Christmas gifts, particularly if you've forked out for an expensive piece of art or jewellery. There are many variations between policies so check the small print carefully to see where you stand. As an example, if you have £45,000 worth of contents but insurance for only £30,000, some insurers may pay only two-thirds of a claim, even if it is for less than £30,000.

"Having to spend hard-earned cash to top up an insurance pay-out is an unnecessary headache, especially as it takes only one phone call to increase your cover," says Julie Owens, the head of home insurance at Moneysupermarket.com.

Students can also find themselves without adequate insurance when they leave home, which is particularly worrying with young people three times more likely to be victims of burglary. Some students are covered by their parents' policies but it is vital to check and to take out separate protection if this is not the case.

A standard household contents policy with Aviva, for instance, gives £5,000 worth of cover for items "temporarily removed from the home". This includes belongings in a student's room, at their shared house or halls on campus and covers them for all standard perils such as fire, storm, flood or malicious damage. Theft is also covered, but only if someone physically breaks into or out of the accommodation.

Some items, such as expensive laptops and bikes, may need additional cover. It's also a good idea to register your mobile phone and other personal items for free on www.immobilise.com. Your property is given a unique identification mark and registered on the site. The police use the site when they have recovered stolen property to try to match the belongings to their owners.

People should also look closely at the value of their clothes, warns Hiscox. The average person spends about £1,000 a year on their gear while the fashion-conscious splash out up to £400 a month. Hiscox's Austyn Tusler says: "Many people don't have a grasp of the value of the clothing and accessories they have accumulated over the seasons.

"As a result, many people may be underinsured when it comes to their wardrobes. One female customer, for example, gave us an estimate of approximately £3,000 to cover her wardrobe contents but, once we had reviewed it, the total was actually more than £25,000."