A contents insurance policy will protect you against loss or damage to items that are not part of the structure or building, in other words, your personal possessions, for example:
- Furniture – Beds, sofas, carpets and curtains
- Electrical goods – Fridges, freezers, cookers, televisions and computers
- Valuables – Mobile phones, tablets, jewellery and watches
- Personal belongings – Clothing and shoes
- Money – Cash, cheques and bonds
Most contents insures policies will provide cover against:
- Fire damage
- Flood damage
- Storm damage
You’ll need to read carefully and understand the terms and conditions of the policy to find out exactly what you can claim and cannot claim for. Typically you won’t be covered for:
- General wear and tear
- Damage to the the structure of the building, you’ll need buildings insurance to cover this.
- Negligence – In any case where you have failed to look after your possessions.
- Being away – Normally a policy will exclude claims made for loss or damage if your home has been unoccupied. Usually for 30 consecutive days.
- Corruption by software virus – To computers, laptops, tablets and mobile devices.
The amount of cover
When buying contents insurance you must make sure you have the right amount of cover, too much and you’ll be paying more for your policy than you need, to little and your insurer may not pay out if you make a claim.
There are three types of contents insurance, all have different methods of calculating the amount of cover:
- Sum insured insurance – You will need to calculate the amount of cover you need for your contents yourself. To do this you’ll need to make a list of everything you own and calculate to cost of replacing your possessions at today’s prices.
- Bedroom rated insurance – The insurer will calculate the amount of cover you need based on the number of bedrooms your home has. To avoid being underinsured your insurer will over estimate the amount of cover you need resulting in a higher premium cost, however, you won’t need to go through all the hassle of calculating the amount of cover yourself.
- Unlimited sum insured insurance – You contents will be covered with no limit, so you won’t have to worry about being underinsured.
Type of cover
There’re two types of cover which will have an effect on your premium.
- New for old – You will be paid the cost of replacing the items. Most policies will have this.
- Indemnity cover – Although the cheeper of the two, you’ll only be paid the current value your items in their current condition.
A good contents insurance policy will include the following features:
- Valuables in total – Coves the loss or damage of valuable items, such as TVs, computers, hi-fi systems, cameras, jewellery and watches. There is likely to be an overall limit your insurer will pay for high risk items.
- Valuables – single item limit – This is a limit on any single valuable item you may have, such as jewellery. You will need to inform your insurer and may have to provide proof of purchase, or value if asked.
- Contents excess – This is the amount you’ll need pay to make a claim. An insurer will usually let you pay a higher excess in return for a lower premium.
- Money in the home – Will provide cover against damage or theft to any cash you keep in your home. Credit cards are not covered and therefore require separate cover.
- Freezer contents – Provides cover if your fridge of freezer suffers a breakdown and as a result your food is spoiled. Any damage is caused by your electricity provider is not covered.
- Contents in the open – Cover for your possessions outside your home but within its boundaries, for example garden furniture. Trees, plants, shrubs and lawns are not covered
- Theft from outbuildings – Covers against contents that are stored in garages and sheds.
- Personal liability – Provides you cover if a claim is made against you if your to blame for an accidental injury to somebody or damage to someones property.
- Tenants’ liability – If you’re a tenant you will be covered against loss or damage to the landlord’s fixtures and fittings.
The following are features that should be or likely be included in your building insurance policy:
- Accidental damage – Provides cover against loss and damage of items due to an accidental nature. Damage caused by pets is unlikely to be covered.
- Index-linked sum insured – This will automatically update the sum insured as the cost of replacing your contents is likely to rise each year, this will protect you from being left underinsured.
- Alternative accommodation – If your home is being repaired of rebuilt due to an unfortunate event, such as a fire or flood, then the cost of living somewhere temporarily, like a hotel or a rented house will be covered.
- Special events increase – This will automatically increase your sum insured during special events such as, weddings, birthdays, Christmas and religious holidays. The reason being as you’re likely to have more contents in your home as usual, for example presents.
- Personal possessions – To cover against loss and damage of valuable items that you take outside your home, like mobile phones, tablets, laptops, cameras, jewellery and watches. Some policies may cover your possessions whilst traveling overseas.
- Legal expenses – Cover for personal legal expenses for problems with the property, disputes and injury claims.
- Repairs guarantee – A guarantee for any repairs carried out to your contents. The repair work must be arranged by the insurer though.
- Emergency helpline – A 24 hour helpline you can call if you have an emergency.
When you take out a contents insurance policy you’ll be able to take out optional extras, such as:
- Plants in garden – Cover for loss and damage to trees, plants, shrubs and lawns. Trees, plants, shrubs and lawns that have died from natural causes or neglect won’t be covered.
- Loss or theft of keys – Covers the cost of replacing your locks in the event you were to lose or have your keys stolen.
- Loss of water – Will cover the cost of lost metered water due to an accidental leak.