Home contents cover protection ensures that your personal possessions are protected from theft or damage.
What is home contents insurance?
Although in adverts many insurers refer to “home insurance”, there are in fact different types of cover that can be purchased, either together in a combined policy or as individual elements. The two most common policies that people want or need are buildings cover and contents cover.
As you would imagine, buildings insurance protects your home as a building should the structural integrity be compromised (so you don’t have to pay for it to be rebuilt if it falls down). Contents insurance on the other hand covers everything within the property (which is not part of the building), ranging from electrical goods to clothes; some policies will even cover the contents of your shed and garage. Home contents insurance is not compulsory (unlike buildings cover which many mortgage providers insist on), however it is wise to have it in order to protect your possessions and help finance the replacement of goods should you be subject to said theft, loss or damage.
How is the cost of home contents cover calculated?
The price of your contents cover depends on the replacement costs of your belongings.
Some insurers will have an estimated figure based on the number of rooms you have in your home. However, while this simplifies the task of working out the valuation of individual items and working out the total figure that is needed to be insured, it can also mean paying a higher premium than is necessary and/or underestimate your possessions leaving you to pay the cost of the replacing some items.
To keep the cost of your cover down, it is worth making note of the value of all the things in your home that it are essential to cover and what it would cost to replace them, just in case the worst should happen. Adding together the total value of all these items is the figure that you should be looking to cover with the policy. Try to be as accurate as possible when drawing together this figure (although it is difficult to be objective regarding your belongings) as this will ultimately be the determinant factor in deciding the cost of the premium you will pay for cover and the settlement amount that you may claim for also.
It is crucial to be objective when assessing the value of your belongings as an overestimation will mean you have paid for too much for your cover. Unfortunately, many people also significantly underestimate the value of items in their homes leaving them uninsured for replacement. It’s always wise to ensure you have given consideration to all of your belongings that you would like covered, including things you have stored in your loft, garage or cellar. If they aren’t accounted for in your valuation submitted to be covered then you will not be compensated for them.
The cost of replacing some items will change annually due to inflation (which may affect some items more than others)
Jewellery replacement could be impacted by the cost of gold and other precious metals. You won't need to update your policy daily in line with international commodity trades, but ensure your valuation at the time the purchasing your policy is accurate (keep workings you have used to calculate it in case your insurer disputes your figures later)
You need to ensure that you have included any new items at least annually, but if you've been given an expensive watch or any other item with a high value, call your insurers to make them aware. It might cost a little, but normally it's considerably less than cost of buying a new one.
Even if you store them in a garage located on your property, motorcycles and cars are not covered by your content insurance as these should have a separate policy even if they are officially off the road under SORN (Statutory Off Road Notification).
Are my contents covered by my landlords policy?
Tenants should be aware that many landlords' policies for contents insurance only covers the items which feature on the inventory report that would have been agreed at the time of signing your tenancy agreement. Contents insurance for tenants is in this sense, perhaps easier due to the fact you need only list the things inside the property which actually belong to you, any other items from the inventory report are the responsibility of the owner to insure and in this case, you are not liable to replace these items.