What is covered in contents insurance?

Nov 4 2011 Advertisement Feature

There are two types of   home insurance which consumers should be aware of: building insurance and content insurance.

It is not a legal requirement to take out both policies - or even one of them - however, one of the conditions for the majority of mortgage lenders is that you take out building insurance.

You may think that buildings insurance is enough, however, for many this is not the case. Contents insurance is also a vital part of protecting your home financially. If your property was damaged in a fire, for example, without contents insurance your possessions and belongings would not be recovered and you would have to pay entirely for replacements.

With home contents insurance in the event of a fire, you could make a claim on your insurance policy. This would help towards the cost of replacing your goods or replacing them fully.

Building insurance alone will cover the structural damage done to a property; this would include the walls, windows, floors, roof and doors.  This would not include your possessions and belongings.

What is covered by contents insurance?

Household contents insurance usually covers items that you take into a property when you move in. This often includes furniture, domestic equipment, electrical appliances, furnishing, clothing, food and drink, some valuables and cash up to a certain limit.

Most household contents insurance policies operate  ‘new for old’ cover. This means that should your possessions become damaged of stolen, you will be given the full cost of replacing an old item. 

It is important to note that some items such as clothing and bedding might not be covered under the old for new basis.

All risks cover is when you take out additional contents insurance cover on items, which can be taken out of the house. You may want to consider this, as these types of items are not usually protected under standard home insurance policies.  This may include items such as a laptop, portable gaming devices, cameras, jewellery or sports equipment.

There is usually an upper limit on any value of a single item. If you feel that you have an extremely valuable item, you can take out additional cover but you might have to agree to certain conditions.
The arrangements could involve you installing a burglar alarm or a security system.

Making a claim

If you underinsured any of the items you listed in your home insurance policy, you may not be entitled to the full cost of replacement. Your insurer may still, however, agree to pay a proportion of your claim. It is therefore, vital that you inform your insurer of the true value of your items.

It should be noted that the higher the value of the items you wish to insure the more insurance premiums you will have to pay.

When making a claim, you must check that your policy is still valid and current. If you have not kept to the conditions of your policy you may not be able to make a claim  on your content insurance.