Contents Cover
Contents insurance is insurance that pays for damage to, or loss of, your personal possessions whilst they are located within your home. Some contents insurance policies also provide restricted cover for personal possessions temporarily taken away from the home by the policyholder.
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.
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 important that you don't under insure the contents of your home. Most policies will ask you to define a ‘sum insured' – this will be the maximum your insurer will pay out.
The best way to avoid this is to create a checklist of absolutely everything you have in and around your home. Be sure to include things you have made and anything that has been given to you because these things will need to be replaced. Try to include an approximate date when the items were bought and save any receipts you might have. It might sound like a lot of hassle but well worth the effort to ensure that the contents are insured properly.
Remember about the limit insurers could place on individual items, as it could be lower than some of your possessions. If this is the case you have three options:
Negotiate for the full value to be included.
Insure the item separately.
Break the item down into components of lower value where possible, for example: a camera can have a lens, the main body and peripheral equipment insured separately.
Contents insurance – variable options
There are some add-ons you can add to your contents insurance policy. These include:
New for old replacement cover – This means they will replace items with equivalent new versions at today's prices.
All risks cover – Includes items taken outside your home. Such as jewellery, mobile phones, etc.
Legal cover – This covers any court costs.
There are some policies available which include court costs for:
Compensation for injuries – If you are in an accident that's not your fault you could be paid compensation.
Consumer disputes – Disputes from buying, holding or selling goods.
Disputes with your neighbours – Such as new fences, etc.
Freezer contents cover – Will pay for a fixed amount should the food in your fridge or freezer become inedible.
Sports equipment cover – Such as golf clubs, squash racquets. Although they will not usually be covered while in use.
Garden equipment cover – Protects against theft from a garden shed.
Additionally, an option to consider is accidental damage cover, which is standard in a lot of policies. This covers against accidents, paint spillages, etc and is available in both building and contents insurance.
Make sure you examine exactly what your insurance policy covers against. All levels of cover should include compensation against theft and fire. However, it could be important to make sure you are covered against storms and flooding, frozen pipes, subsidence and more. Also, if you have extended or plan to extend your property make sure your policy reflects the changes you make.