Two-thirds of consumers guess when it comes to valuing their belongings for home insurance.
Research by The Co-operative Insurance has discovered that many people are leaving their possessions under-insured because they do not have a system in place for working out how to accurately price them.
Indeed, the average insurance gap is £3,400 and so 22 per cent of individuals would lose out on thousands of pounds if they were forced to make a big claim on their insurance policy.
Carl Burton, Home Insurance Manager at The Co-operative Insurance, said: "Understandably, people forget to update their home insurance policies and don't tend to regularly evaluate how much their belongings are worth."
Gold jewellery, stamp and coin collections, musical instruments and paintings are among the most common items that are underinsured in houses.
Despite the fact that 82 per cent of people have a home insurance policy, 50 per cent do not update it annually, thus leaving themselves open to major losses if their items are damaged or stolen.