Bolster your home insurance: the 'all risks' add-on

How much does it cost? What you'll pay will depend entirely on your home contents policy – and that in turn depends on your postcode, how much you insure and your claims history.

As an indication, our research found the annual cost of adding £1,000 of personal possessions to a home contents policy ranged from £12 to £15; for £2,500 of personal possessions cover, between £16 and £26 a year; and for £5,000 cover, £32 to £49.

Be prepared for a higher premium if you include expensive jewellery on the policy. Add a £5,000 ring, say, as a specified item to cover outside the home, and you'll see the premium rise considerably.

Our research shows you'd expect to pay a typical extra £80 a year for this to be covered while out and about. And remember, this will be on top of the cost of the add-on itself.

Got kids at uni? They can benefit too. If you've a son or daughter studying at university with a mobile or laptop, your add-on can give them extra protection too.

And don't forget it's already the case that your home contents insurance may automatically cover them against theft or damage under the 'temporarily removed from the home' section while they're a student. The cover only applies for items while they're in student digs and as long as the parents' home remains the son's or daughter's main permanent address (see Student MoneySaving for more tips 'n' tricks).

Any claim on the add-on will affect your home contents policy. You'll have to pay an excess (usually, but not always, the same as that picked by you for the original policy) for each claim. However, any claim you do make will affect your premium at renewal – and affect any no-claims discount you may have built up.

Be careful to conceal items in a car. One of the add-on's biggest selling points is a payout if your items are pinched from a locked, unattended car. But most won't pay out if you haven't locked your item in the boot (and hidden it from view) or concealed it in a glove box.

Leave a handbag under a coat on the front seat or wrap a tablet in a jumper on the floor, and you won't be covered. Most car insurance includes an element of this already, known as 'personal effects' cover. However, it's generally limited to a total of £200 regardless of what is stolen.

Is the add-on worth it? A personal possessions add-on is a policy that everyone should consider. Whenever you step outside the home, you'll usually be carrying a mobile, wearing jewellery, sporting a bag and perhaps wearing an expensive article of clothing – and because we do it daily, it's easy to forget just how much it's all worth.

Think of it as a portable home insurance policy you can take wherever you go – if your personal items are stolen, lost or damaged, the add-on will pay for them to be replaced. It's a small outlay in comparison to the cost of replacing it.

Put bluntly, whether to get it will also boil down to a pertinent question: are you a loser? We don't mean to call you names, rather that if you're likely to leave a bag or wallet in the back of a taxi or have a tendency to be accident-prone, then the add-on will be worth it.

But if you're more careful and make a habit of taking extra caution with valuable goods when in public, you'll have much less need of it. It will be a question of your attitude to risk.