Written by: Cally Worden
Anyone looking to save money on household expenses may question the need for Home Contents Insurance. This is the insurance that covers your belongings, not the building you live in or its fixtures and fittings. Buildings and Contents insurance can be obtained separately, or as part of a joint policy. Contents insurance is not obligatory and, depending on the amount and value of items in your home, some may consider that the choice not to take out contents cover is worth the risk.
What Things does Contents Insurance Cover?
Most Contents Insurance policies will cover you for loss or damage to anything in your home that is not part of its physical structure. They are the things that you can replace and repair without shelling out a fortune. Things typically included are:
- Electrical goods
Most policies will apply a Single Item Maximum Value clause (or similar) – the level of this can vary, so be wary if you have a particularly expensive item of jewellery for example. You may be advised to make specific mention of such items in your policy, you may have to pay a small premium to acquire individual cover for them.
Types of Cover
Contents policies cover you for various things. Some are included as standard, but others are optional extras, so check your policy carefully to make sure you have the cover that you require:
- Theft, fire and flood – these are normally included as standard, but if your home is in a flood-risk zone, low-lying, or near to a river or lake it is worth checking that flood cover is included
- Accidental damage – this is usually optional, and would normally cover you for things like wine spilled on a carpet, or the TV falling off the wall
- Personal Possessions Cover – again, usually available as an option, this covers personal items that you take outside of the home, such as your camera, briefcase, jewellery and laptop
- Holiday Cover – for items that you may take abroad with you on vacation
Beware the Exceptions
There are a few specific things that Contents Insurance does NOT cover. These typically include:
- Wear and tear
- Computer damage as the result of a virus
- The structure of your home – including fixtures and fittings such as fitted storage units, and your bathroom suite. Such items are normally covered under a Buildings Insurance policy
Insurance companies prefer not to pay out unless they have to, so if you opt to take out this kind of insurance you may also want to consider the following:
- Whether yours is a ‘New for Old’ policy – i.e., when your 5-year old TV gets stolen do you receive an amount equivalent to the cost of a new one in today’s money, or the value of your old TV on the open market?
- In certain circumstances you may be asked to prove the existence of your items when you claim for them. It’s prudent to take photos of key items, just in case
- Your will normally have to pay an excess on any claim – this is an initial contribution to the value of the insurance you receive for your lost items, often around several hundred pounds. It is designed to prevent you from claiming every time drop a glass on the floor. Because that would be silly really, wouldn’t it!
- Make sure you accord a realistic value to your items, and add up to a collective amount of cover that would be sufficient for your to replace as many of them as possible in the event of catastrophic loss, such as in a house fire