Insuring your belongings may not be high on your list of priorities when there are so many other essentials to pay for. But have you contemplated how much it would cost to replace your possessions after an unexpected event? What if you came home to find that you’ve been burgled and your valuables have been stolen? What if a fire broke out in your home and destroyed everything inside it? Could you really afford to replace everything? With contents insurance in place, you have financial protection so that the costs of replacing your possessions are covered.
What is contents insurance?
Contents insurance is a type of home insurance. It provides you with financial cover for theft, loss or damage to your possessions. Unlike buildings insurance, which covers the structure and fixtures of your home in Bexley, contents insurance covers everything within it that you can physically remove. This includes everything from your appliances and utensils to the carpets, light fittings, valuables, furniture, ornaments, kids’ toys, curtains, clothing, freezer contents, tools and garden furniture.
You’re covered in the event of theft, vandalism, storm damage, fire damage, flooding, explosions, water leaks, subsidence and fallen trees. You can also choose optional cover. This includes accidental damage, home emergency cover, legal expenses cover, personal possessions cover, away-from-home cover and bicycle cover. These add-ons vary with the protection they provide. You may prefer the peace of mind that comes with including some of them in your contents insurance policy.
How does contents insurance work?
If you have to make a claim, the payout from the insurer will either be made on a new-for-old basis or an indemnity basis.
New for old: This type of settlement covers the cost of replacing your item with a new equivalent. For example, if a rug that you’ve had for years has been ruined, you can buy a new like-for-like rug. The premiums are likely to be more expensive for this option as higher payouts are usually provided.
Indemnity: Wear and tear is allowed for with this type of cover. This means that the payout you receive will be based on the value of the item at the time it’s been stolen, lost or damaged rather than the value of a new replacement item. For example, you may originally have paid £600 for your sofa but have had it for 5 years. The insurer will reduce the payout to reflect its age and condition. Whilst this option is cheaper than the new-for-old basis, you may be left considerably out of pocket when claiming for your items.
How much cover do you need?
You can choose between three types of contents insurance: sum insured, bedroom rated and unlimited sum insured. With sum insured, the cover is based on the total value of your belongings. Bedroom rated, on the other hand, is based on the number of rooms in your Bexleyheath home. The insurer sets the cover amount based on this. You don’t have to work out the value of your possessions and you may have more cover than you need with this option. The amount you’re covered for with the unlimited sum insured option doesn’t, as you’d expect, have a limit. Therefore, you can be confident that you’re not underinsured in the event of a claim.
Work out the value of your possessions
The easiest way to do this is to walk from room to room making a list of every item within it. This includes anything you have in your loft, garage, shed and garden. Next, work out the value of each item. This needs to be based on what it would cost to replace it now rather than what you originally paid for it. Be careful not to underestimate these values. Otherwise, you could find yourself left seriously short of funds in the event of a claim.
Single article limit
Insurers usually set a limit for how much you can claim for a single article. Check this amount and be sure to list anything with a value that’s higher than that separately to ensure it’s covered. For example, the single article limit may be £1,000. You may have jewellery, designer handbags, musical instruments and computer equipment that exceed this amount. You may need to pay more for these items to be covered. However, if you don’t notify your insurer of these high-value items, would you be able to afford to replace them if something happened to them?
Do you need contents insurance?
You may have dismissed the need to get contents insurance as it’s another expense or you don’t think your belongings are worth that much. But have a quick look around you at just some of the items you own. Think about how much each item would cost to replace. Then think about some of the contents in another room and do the same. You may not have thought it was worth insuring your belongings but once you start adding up the replacement costs, you may be surprised at how much they come to. Whilst you can’t get your original items back if something happens to them, you can at least cover the costs of their replacements when you have contents insurance in place.
Put financial protection in place for your home contents
Our mortgage and protection consultants, located in Kent, London and Edinburgh, can help you decide on the right type and level of cover needed. They will ensure that you’re fully aware of what is and isn’t included in your policy. They will also advise you on the optional extras that are available. One add-on you may prefer, for example, is personal possessions cover. This provides financial protection for items that you take with you when you leave your home. For example, your phone, watch or handbag. Another is accidental damage cover for those awful moments when unfortunate incidents occur, such as spilling a glass of red wine over your pale-coloured sofa.
Do you need buildings insurance too? We can also arrange that for you and you may prefer to combine it with your contents insurance in one convenient home insurance policy. Simply call us on 01322 907 000 to speak with one of our experts. Benefit from an affordable and tailored solution to your financial protection needs.