Have you ever wondered how you\u2019d cope if you lost your valuables to fire, theft or damage from flooding? That is what contents insurance is for \u2013 to provide financial protection if those things happen.<\/p>\n\n\n\n
Contents insurance is a type of home insurance. It covers loss or damage to all the things in your home that aren\u2019t part of the structure or building. This includes all your personal belongings \u2013 anything not physically attached to the building \u2013 against the cost of loss or damage.<\/p>\n\n\n\n
The other type is buildings insurance (which protects the structure of your house and its permanent fixtures). You can buy both types of insurance separately, or you can buy them as a joint home insurance policy.<\/p>\n\n\n\n
Contents insurance is insurance that pays for damage to, or loss of, an individual\u2019s personal possessions while they are located within that individual\u2019s home. Some contents insurance policies also provide restricted cover for personal possessions temporarily taken away from the home by the policyholder.<\/p>\n\n\n\n
In this context, “possessions” means anything that is not permanently attached to the structure of the home (possessions that are permanently attached to the structure of the home can only be insured via home insurance.) Some contents policies may also include possessions kept in outbuildings or in the garden area attached to the house.<\/p>\n\n\n\n
Contents insurance is usually sold alongside home insurance but it can also be purchased as a stand-alone policy, especially for those who are renting rather than owning their home. It is optional, whereas if you have a mortgage there is a requirement to have buildings insurance. However, insuring your possessions is generally a sensible idea, whether you\u2019re a tenant or the owner.<\/p>\n\n\n\n
If you\u2019re a tenant and want your possessions to be insured, it\u2019s up to you to take out contents insurance, not the owner.<\/p>\n\n\n\n
How contents insurance works is you pay your insurer a premium to cover you if something happens to the things in your home. This could be something like a fire or flood damaging your furniture, or your jewelry is stolen. You can choose to pay:<\/p>\n\n\n\n
Your insurer will try to repair any damage if something goes wrong. If this isn’t possible they will look to replace it on a like-for-like basis.<\/p>\n\n\n\n
There are three main types of policies available:<\/p>\n\n\n\n
If you have a \u2018sum insured\u2019 policy and need to calculate the amount of cover you need, you have two main options. One is to search online for a content calculator, which most comparison sites offer. Or, you can list everything that you own and add up what it would cost to replace every item at today\u2019s prices.<\/p>\n\n\n\n
Be aware that if you use a comparison site to shop around you might not get a choice. The site will ask you how much contents cover you want and will pick policies that offer this.<\/p>\n\n\n\n
Policies can vary in terms of what exactly they cover, but they usually include:<\/p>\n\n\n\n
You\u2019ll usually be covered against theft, fire and flood, but cover for accidental damage tends to be an optional extra.<\/p>\n\n\n\n
\u2018Personal possessions cover\u2019 can also be added for extra cost. This is sometimes referred to as an \u2018all-risks extension\u2019 and it will cover items you take outside your home, including:<\/p>\n\n\n\n
Some insurance policies will also cover you for when you go abroad, so if you lose or damage your possessions while you\u2019re away, you\u2019ll be able to claim for them on your contents insurance. This is usually another optional extra that you add in return for a higher premium.<\/p>\n\n\n\n
The structure of your home and the fixtures and fittings all come under buildings insurance.<\/p>\n\n\n\n
Your items are only covered by contents insurance when they are in your home. So if your mobile phone is lost or stolen when you\u2019re out, it won\u2019t be covered. You can add extra cover to your policy to\u00a0cover personal things away from your home.<\/p>\n\n\n\n
The same goes if you leave your home for a long period and someone breaks in. This might mean your claim is invalid. You\u2019ll need to check your policy to see how long you can leave your property empty for.<\/p>\n\n\n\n
Other things that may not be covered by contents insurance include:<\/p>\n\n\n\n
According to the latest data, the average contents insurance quote is \u00a349 per year. How much your contents insurance costs depends on several factors including:<\/p>\n\n\n\n
If you\u00a0work from home,\u00a0you may need more than basic contents insurance.<\/p>\n\n\n\n
If you\u2019re an employee and working from home, you probably don\u2019t need extra insurance. Your employer\u2019s insurance should cover your laptop or monitors.<\/p>\n\n\n\n
But if you work for yourself, you’d only need cover if you have employees working from your home or people visiting for meetings. But it’s best to check the wording of your home contents insurance so you know exactly what you’re covered for.<\/p>\n\n\n\n
Your mobile phone should be covered by your home insurance, just like any other possession. This means if it\u2019s stolen from your home in a burglary or damaged in a fire or flood, it should be protected.<\/p>\n\n\n\n
However, if you really rely on your mobile phone it could be worth adding accidental damage and personal possessions away from home cover to ensure you have more comprehensive protection.<\/p>\n\n\n\n
Alternatively, you may want to consider specialist mobile or gadget insurance.<\/p>\n\n\n\n
If you want to cover for any damage your pets may cause your belongings you should consider\u00a0accidental damage insurance. This is because most pet damage isn’t covered by a standard contents policy.<\/p>\n\n\n\n
It’s usually an add-on to a contents insurance policy, but what it covers depends on the policy. It might provide cover if your dog sends your favorite vase flying or destroys your sofa, but each policy varies.<\/p>\n\n\n\n
This is why you should check if the add-on is appropriate for the type of damage you think your pet could cause before you take it out.<\/p>\n\n\n\n
It depends on how much your bike is worth. If it\u2019s an old battered bike, your contents insurance policy will probably cover it. However, insurers set a limit on how much they cover bicycles. Above this value, and you should specify that your bicycle is a high-value item on your policy.<\/p>\n\n\n\n
You might also find out that it\u2019s only covered as a standard if it\u2019s stolen from your home rather than when you are out and about.<\/p>\n\n\n\n
Depending on the circumstances you may be better off getting a stand-alone\u00a0bicycle insurance\u00a0policy.<\/p>\n\n\n\n
When choosing contents insurance, think about the value of your belongings. Ask yourself what you could afford to replace or lose if something went wrong.<\/p>\n\n\n\n
Most contents insurance offers the replacement value of your belongings, sometimes called ‘new for old’ cover. It covers the full cost of replacing your belongings with new ones, which often cost more. Replacement value gives you the best cover, but it’s more expensive.<\/p>\n\n\n\n
Some policies offer the value of your lost or damaged belongings. This covers their worth at the time of insurance. For example, your fridge’s value might currently be $500, so you get $500 from the insurer. It may cost more to buy a new one of similar quality. This value is likely to depreciate (go down) each year.<\/p>\n\n\n\n
When you claim, insurers may repair or replace the damaged items, or pay you the amount it would cost to repair or replace them.<\/p>\n\n\n\n
Work out what your belongings are worth to see how much cover you need. It will also help you identify what items are worth insuring.<\/p>\n\n\n\n
Start by listing all your belongings and how much each item would cost to replace (at today\u2019s prices). Include as many details as possible. For example, serial numbers, receipts, warranties, photos, condition and the date of purchase.<\/p>\n\n\n\n
Contents insurance covers loss and damage caused by defined or insured events. These can include fire, storm, theft and vandalism.<\/p>\n\n\n\n
It’s worth checking what isn’t included. For example, damage caused by floods<\/a>, intentional or criminal damage, or theft if you leave windows or doors unlocked.<\/p>\n\n\n\n Also, check what items your insurance does not cover and decide if you want to add something. For example, portable items like your handbag, glasses, camera, bicycle,\u00a0mobile phone, tablet or laptop. Or valuable items like jewelry and special collections, such as artwork, stamps, rare books or memorabilia.<\/p>\n\n\n\n Most policies have maximum amounts on how much you claim for certain items. For example, suppose $1000 is the limit for electrical appliances. If a fire destroys your $2000 television, you\u2019ll end up having to pay the difference to replace it.<\/p>\n\n\n\n Most insurers allow you to adjust your excess. Weigh up the difference between having a high premium and low excess, versus the opposite. You may be able to save on your premium by increasing your excess.<\/p>\n\n\n\n Most contents insurance doesn’t include cover for accidental damage. It may be worth adding this if you want to cover for mishaps, such as staining your couch or smashing a vase.<\/p>\n\n\n\n Also check what the insurance doesn’t cover, for example, damage to clothing or computers.<\/p>\n\n\n\n If you rent your home, renters insurance could be a good option. This type of contents insurance is usually cheaper. It may cover accidental damage to the house, and legal costs if someone injures themselves on the property. However, it has more exclusions and limits than regular contents insurance.<\/p>\n\n\n\n You may pay a lower premium if you bundle your contents insurance with your\u00a0home insurance, pay annually or apply online. You could get a discount if you have deadlocks, fire extinguishers, smoke alarms or a security system.<\/p>\n\n\n\n Some insurers offer extra benefits. These could include replacing locks and keys after a break-in, or covering for your belongings when you move house.<\/p>\n\n\n\nCheck limits for certain items<\/strong><\/h3>\n\n\n\n
Adjust your excess<\/strong><\/h3>\n\n\n\n
Consider accidental damage cover<\/strong><\/h3>\n\n\n\n
Consider renters insurance<\/strong><\/h3>\n\n\n\n
Take advantage of discounts and benefits<\/strong><\/h3>\n\n\n\n
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