Contents Insurance Guide
Home insurance provides people with cover in case their property or its contents are damaged or destroyed. When someone buys a policy they pay premiums in return for protection which means, if something happens to their home, they can claim money to pay for the cost of repairs.
Home insurance is split into two categories – buildings and contents insurance.
While buildings insurance covers the bricks, mortar, fixtures and fittings, contents insurance provides cover for the removable objects in the home. It ensures valuable items are protected against loss, theft or damage. Valuable belongings which can be picked up and removed could be included in a contents insurance policy.
What does it cover?
Contents insurance usually covers, as standard, belongings such as clothes, jewellery, electrical equipment like televisions and DVD players, any antiques or valuable trinkets, sports equipment and kitchen appliances. They are covered in the eventuality of a fire or other disaster destroying your belongings but also in case you are targeted by vandalism or theft.
Some of the more comprehensive policies will allow the policyholder to claim if a belonging is accidentally damaged or lost. Others will also allow you to claim for stolen credit cards or money. Some go as far as to pay out if you spill wine on your carpet. The more comprehensive your policy, the more you will pay in premiums, but the greater your cover will be.
Who is contents insurance for?
Anyone with any items of value in their possession would be wise to take out a contents insurance policy. It will provide you with peace of mind that should you lose a valuable possession through theft or damage, you can at least afford to replace it.
If you are a tenant, although it is up to your landlord to take out buildings insurance, it is your responsibility to organise contents insurance. You should take out contents insurance to cover the fixtures and fittings in the property to cover any damage you might cause.
Pitfalls of Contents Insurance
It is important, when setting up a contents insurance policy, that you provide correct valuations for each item. Over-insuring your property could leave you with higher premiums than necessary. However, under-insuring could find you out of pocket if you need to make a claim.
Check the excess. This is a set amount of money the policyholder must pay, before the insurance company provides any money, when making a claim. The higher the excess, the lower the premiums will be. If the claim made is lower than the excess – you will end up paying for the entire claim yourself.
Where to buy Contents Insurance
If you are a homeowner and intend to take out buildings insurance, it is first worth finding out whether you can save money by taking out a joint buildings and contents policy.
However, as with all financial products, it's important to scour the market for the best deal. Not only will this help you find the policy to suit you but it will very likely save you money.
Insurance brokers are a good place to go if you want the experts to do the searching for you. Alternatively, comparison websites are a good way to weigh up the deals on the market – although they don't include all the products available. Buying online can also help you save money as insurers often provide discounts to customers buying via the internet.