Contents insurance is one of the least utilised types of insurance, but one that could save you a lot of money. If you haven’t heard of contents insurance before or haven’t considered purchasing it, read on to learn everything you need to know about it and why you should get it immediately.
What is Contents Insurance?
Contents insurance is sometimes referred to as home contents insurance and covers the personal items in your home for a monthly fee. If these items are damaged or stolen then you can create a claim and receive an amount of money from the insurance company to replace the item. The actual contents that you can ensure depend on the policy, but can include almost anything you want from phones and laptops to bedding and jewellery. Contents insurance is often purchased as part of home insurance packages but is also available as a stand-alone policy. If you want to insure a specific product such as a mobile phone, types of home insurance that includes very specific contents insurance can be used.
How Does it Work?
Just like home insurance, if one of the items that are covered under your contents insurance agreement is broken or gets stolen you can contact them to start the process of a claim. If you are lucky, your insurer will settle your claim as a new-for-old case which means they will replace the item with a brand new product or equivalent value. Alternatively, the insurance company will pay out an amount lower to the value of the item at a price they determine is fair. They calculate this based on evidence and information about the product. If they determine that it is old or has some wear and tear then they may only offer an amount towards a replacement rather than the full amount.
Different Types of Contents Insurance
Just like home insurance, there is also a multitude of contents insurance policies that group together various belongings. If you don’t particularly have anything valuable apart from your electronics, then you may be able to secure a good home insurance policy with an electronics content insurance policy.
There are also various types of contents insurance based on the amount of cover you want. A sum insured policy will cover you up to the amount your belongings collectively are worth. A bedroom rated policy will use the number of bedrooms in your house to decide how much cover you can get. Unlimited sum insured will cover all of your contents or belonging up to an unlimited amount. This last home insurance policy will obviously cost significantly more than the other two and require less evidence.
Top Tips
If you are buying a new home and are looking at various home insurance policies with built-in contents insurance, it is important to remember these key rules to ensure you get the best policy possible.
Do your research. There are lots of price comparison websites that are fairly accurate when it comes to determining how much you will have to pay. Remember, these companies are competitors so if you can show them that another company is offering you this for a similar policy they are likely to try and match it, or even better it.
Consider your risk. If you are in an area that experiences a lot of burglaries for example then you may opt to go for the unlimited protection policy. Similarly, when applying for the policy and sending evidence and pricing your belongings, try to be accurate as this will save you a lot of heartaches if you have to deal with the insurance company to try and replace your beloved items.
Get the right level of cover. Be as accurate as possible when valuing your contents. You don’t want to under or over-insure your belongings. Read the terms of your policy – carefully. Once you’ve found a policy, read the terms and conditions carefully to reduce the chances of being caught out if you ever have to make a claim.
Home insurance is the first thing you should do when buying a home. While it is a pain, it could save you a lot of heartache if something were to go wrong with your home. When purchasing the home insurance, you should also make sure it includes some form of contents insurance. This specific insurance will cover your belongings if they get damaged or stolen. Considering the price of mobile phones these days, a small price a month to make sure you are covered if something goes wrong could save you in the long run.
