Put simply contents cover insures all of the items within your home, with some policies covering those items kept outside, or within out-buildings too.
Although there are many “smaller” options and added extras, there are two main types of policies that you can choose to cover your possessions.
Firstly there is “New-for-Old” cover, which, in the event of a pay out will ensure all of your possessions are replaced with new counterparts. Although the premiums for this kind of cover may seem a little steep, it’s important to take into consideration the high values of depreciation for certain items such as furniture and electrical equipment.
Secondly is “Indemnity” cover, which tends to be the cheaper option of the two, as if the insurer has to pay out, they will deduct the cost of everyday “wear-and-tear” from each item replaced.
The breadth of cover you require will vary greatly depending on your individual requirements. As well as all the obvious items, there are some that may or may not be included a standard.
Examples include; items that may be used outside of the home (e.g. laptops, bicycles, handbag or wallet contents).
The number and type of eventualities resulting in a payout will also vary considerably from policy to policy, typically though, cover against theft; fire, flooding, earthquake and vandalism are included.
Wilful damage and damage caused by DIY though, are common claims that are rejected.
The value of your possessions is likely to far exceed what you would expect, so as a rough guide; you should move from room to room, calculating how much it would cost to replace each item from new.
With this in mind you should then be able to see if the amount of
home insurance you have is relative to the value of your possessions.
For more expensive items (e.g. antique jewellery) then it may be worthwhile taking out separate
house insurance cover for each item. Whatever you decide to do, shopping around for
cheap home insurance is recommended.
