AS THE New Year sales draw to a close, many people will be settling down to freshly decorated rooms and new electrical equipment and furniture.

But are these homeowners aware of the true value of their household contents? Insurer Hiscox warns that they are likely to increase the amount by which they are underinsured even further following any improvements.

New research has found that living rooms and kitchens are considered to be the most valuable rooms in the home. The survey found:

* Nearly half (46 per cent) believed the sitting room to be the most valuable room in their house.

* Two in five (42 per cent) said the kitchen was the most valuable.

* One in 20 (six per cent) voted for the bedroom.

* Bathrooms came bottom in the value stakes with less than one per cent of homeowners claiming this was the most expensive room.

However, with many homes underinsured by as much as 40 per cent, Hiscox believes that although homeowners know which rooms are the most valuable, they don't realise just how valuable they are.

Kevin Kerridge, director of Hiscox Direct, said: “Many people are seriously underinsuring their home contents and this is mainly for two reasons: firstly homeowners don't fully value everything they own and secondly they don't revalue on a regular basis.”

Follow these tips for estimating the true value of your home contents:

* Take a room by room approach so you can calculate the full value accurately. This will also mean you can carry out your valuation over a week or two.

* Think about the contents in every room, not forgetting the loft, garage and other outbuildings.

* Add up the replacement value for everything you own.

* When calculating values, don't add up the price you paid for the item but add up the amount you would have to pay to get a similar item in the shops today.

* If you bought items in the sales, it is important to calculate the value you would have to pay to replace the items at normal prices.

* If it is difficult to establish the right figure - for example with jewellery, art or antiques - an expert valuation may be necessary.