Have you thought about how much it would cost to replace the contents of your home if something unexpected were to happen? If you add up the costs of your furniture, soft furnishings, appliances, electrical items, clothing and valuables, it’s an incredibly expensive amount to find if they are damaged, stolen or destroyed. This is where contents insurance comes in. Having this in place provides you with financial protection to cover the costs of replacing your possessions.
At Trinity Finance, we help you put the right amount of cover in place for your home contents. Our mortgage and protection advisers can guide you on the types of contents insurance available, how it works if you have to make a claim, what’s included and excluded from your policy, the optional cover you can have and how to work out what your belongings are worth.
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What is contents insurance?
This type of home insurance covers your possessions, protecting against theft, loss or damage caused by events such as fire, floods and subsidence. Whilst buildings insurance covers the structure of your property and its fixtures, contents insurance covers everything else within it.
Types of contents insurance
It’s important to make sure the cover you have is sufficient enough to pay for the replacement of all of your possessions if need be. This includes everything that can be removed from your property, down to the carpets, curtains, light fittings and any items you may store in your loft, shed or garage. There are three types of contents insurance policy to choose between — sum insured, bedroom rated and unlimited sum insured.
- Sum insured: With this type of policy, you need to calculate the total value of your possessions. We’ll detail how you can do this later on in this guide.
- Bedroom rated: The amount you are covered for with this type of policy is determined by the number of rooms in your home. This saves you from having to work out the value of your contents as the insurer sets the amount of cover. More cover may be provided than you actually need with this option but you’re also likely to pay higher premiums.
- Unlimited sum insured: There’s no limit to the amount your insurer covers you for with this type of policy. You can have peace of mind, therefore, that you’re not at risk of being underinsured.
How does contents insurance work?
In the event of a claim, the settlement you receive is either worked out on a ‘new for old’ or an indemnity basis.
- New for old: This means you will receive a payout for a new version of the item that you have claimed for. For example, if you bought a rug a few years ago and it has been ruined, the payout will enable you to buy a new rug.
- Indemnity cover: With this cover, wear and tear is taken into account so you’ll receive a lower payout based on what your item is currently worth rather than what you originally paid for it. For example, you may have paid £600 for a sofa when you bought it 5 years ago. The insurer will reduce the amount to be paid out based on the age of the sofa as well as its current condition.
As new-for-old settlements usually provide higher payouts than those on an indemnity basis, the premiums tend to be more expensive to reflect this.
What is covered with contents insurance?
Contents insurance covers all of the belongings in your home while its structure and fixtures are covered by buildings insurance. Basically, anything that you can physically take out of your home when you move can be put under your contents insurance policy. Whilst each policy is different, these items can include:
- Furniture — sofas, dining tables, chairs, beds, wardrobes, cabinets and bookcases
- Soft furnishings — cushions and curtains
- Appliances — cookers, microwaves, fridge freezers and washing machines
- Electrical equipment — televisions, home office equipment, games consoles, laptops, tablets and phones
- Kitchenware — cutlery, crockery and cookware
- Floor coverings — carpets and rugs
- Clothes, shoes and linen
- Valuables — jewellery, watches, art, antiques, important documents, coin and stamp collections, cash and credit cards
- Sports equipment
- Leisure items — video games, musical instruments, books, DVDs, CDs and toys
- Garden furniture and equipment — tables and chairs, barbecues, lawnmowers, tools and garden ornaments
- Digital assets — downloaded films and music
- Freezer contents
Single article limit
Limits are usually set for the amount you can claim for single items, such as £1,000. If you have any belongings that are worth more than this limit, you need to list them separately to ensure they are covered. This can include high-value items such as your valuables, computer equipment, collectible items, musical instruments and bicycles. You may need to pay more to have these items covered.
Events covered by your contents insurance policy
Contents insurance policies usually cover your belongings against:
- Storm damage
- Fire damage
- Water leaks
- Fallen trees
What’s not covered with contents insurance?
Contents insurance policies don’t normally provide cover for:
- Wear and tear
- Electrical or mechanical breakdown — for example, a freezer that comes to the end of its life and stops working
- Deliberate damage
- DIY incidents
- The loss of downloads due to a computer virus
- Damage that has been caused by your pets
- Accidental damage — you can include this in addition to your standard cover as detailed below
Optional add-ons to your contents insurance
Whilst standard contents insurance provides cover for your belongings against a lot of issues, there are other types of protection that you may wish to add to your policy. Some insurers automatically include these extras so it’s best to check what is and isn’t included carefully to benefit from the maximum protection.
Accidents happen, such as spilling paint on your carpet, breaking a mirror or dropping your favourite ornament. You may watch in horror as your kids knock over the television or your phone falls out of your pocket and down the toilet. With accidental damage cover, you can have peace of mind knowing that these unfortunate incidents are covered.
Home emergency cover
This ensures that unexpected costs are covered when you have a home emergency. For example, your boiler might stop working, a window might be broken or there might be a burst pipe. This type of cover provides you with emergency assistance and covers the costs of an emergency call-out for a tradesman as well as the repair charges. If you’re unable to stay in your home while the repairs are being carried out, the cost of overnight accommodation is also covered.
Legal expenses cover
This provides you with a range of legal services and covers the related legal costs for various issues. Someone may make a claim against you for an injury that happened in your home, for example, or you may need help with a neighbour dispute. It also covers you for instances that occur outside of your home, such as employment issues. As well as that, legal expenses cover provides financial protection for your loved ones.
Personal possessions cover
This is also called out-of-home cover and can extend worldwide, depending on the policy. It provides financial protection for the possessions that you take out of your home, such as your phone, tablet, laptop, watch, jewellery, sunglasses, handbag, camera and golf clubs.
This protects your children’s belongings, such as their phones or laptops, when they go away to university. This is usually up to a certain limit so they may need to take out separate insurance of their own.
Bicycles are usually covered under standard contents insurance but if your bike has a value that’s higher than the single article limit, you’ll need to list it separately. Some policies only provide cover for bicycles when they’re stolen from your home rather than when you’re using them elsewhere so be sure to check this.
Our mortgage and protection brokers can simplify the process to help you decide on the right type and level of contents insurance cover. They are highly experienced in dealing with home insurance and will make sure that you’re fully aware of the policy inclusions and exclusions as well as the optional extras available to you. To begin shaping your contents insurance policy, simply give us a call on 01322 907 000. If you prefer, send us an email at email@example.com or an enquiry via our contact form and we’ll reply to you as quickly as possible with more information.
Do you need contents insurance?
Having contents insurance isn’t a legal requirement but it offers financial protection should anything unexpected happen to your belongings. What would you do if a fire broke out in your home and destroyed some of your furniture and other belongings? Or if you came back home one evening to find that it had been burgled and many of your valuables had been taken? Think about how much they’d cost to replace and if you could afford to do that. Although you can’t get your original belongings back if they’ve been stolen or destroyed, you can at least afford to buy replacements with the cover in place from your contents insurance policy. As you’ve probably already got buildings insurance for your home, you can combine this with contents insurance to save money instead of taking out a separate policy.
Working from home
If you work from home, check the terms of your policy to see whether you are covered. You may not need to be covered if, for example, your employer provides you with the equipment to work, such as a laptop, as this may be covered by their insurance. However, if you use extra equipment, are self-employed or book in-person appointments at your home, you may need additional cover.
As a landlord
If you’ve decided to rent out your property with furniture, you should have financial cover in place to protect against the costs of theft or damage to your belongings. Your tenants are responsible for insuring their own belongings but you’ll need to cover yours with landlord contents insurance.
As a tenant
Your landlord is responsible for insuring the building and their own contents but you need to take out separate contents insurance for your own belongings. Contents insurance for renters that includes tenants’ liability cover can also protect you against accidental damage to items that belong to your landlord. This means if you accidentally break a window or spill a drink on the carpet, you won’t risk losing your deposit.
As a student
When you go to university, your belongings may be covered up to a certain amount by your parents’ contents insurance policy. This is unlikely to cover all of your belongings so you should consider student contents insurance, particularly if you live in shared student accommodation or halls of residence.
How much are your belongings worth?
You need to know the value of all of your belongings to decide how much cover you need but working out how much everything that you own costs can seem like a daunting task. To make it easier, take one room at a time and list everything you own with the exception of the fixtures, such as built-in wardrobes, a bathroom suite or a fitted kitchen. Don’t forget to include the items in your freezer, loft, garden, shed and garage. List your high-value items separately to make sure they are covered by the insurer.
Once you have your inventory, add up the replacement costs for every item. Base this on the costs to replace each item with a brand new equivalent rather than using the prices you originally bought them for. Try to be as accurate as possible so that you’re not underinsured. You need to make sure that you’re covered for the cost of replacing everything you own should the worst happen and they’re destroyed.
How much does contents insurance cost?
The amount you’ll pay for your contents insurance depends on various factors. These include:
- The value of your belongings, including your high-value items
- Any add-ons that you’ve chosen to include
- Your location — your property may be in an area that’s prone to flooding or has a high crime rate, increasing the risk for the insurer
- The security measures that are in place
- Whether you’ve claimed in the past
Benefit from cheaper contents insurance
There are measures you can take to benefit from lower premiums. One is to pay annually for your policy rather than monthly as interest is usually charged on monthly premiums. You can also consider combining your contents insurance with buildings insurance as many insurers offer a discounted rate to do this. Think about improving the security of your home to reduce the risk for the insurer. This can be with better window and door locks, installing a burglar alarm and having a safe.
Another way to reduce your premiums is to increase the excess. Whenever you make a claim, you’ll be charged this amount, which is your contribution to the claim. If you agree to pay a higher excess, you should benefit from lower premiums. If you’ve built up a no claims discount (NCD), meaning you haven’t made a recent claim, you may benefit from cheaper contents insurance. Also, instead of allowing your policy to auto-renew, get in touch with our mortgage and protection advisers beforehand. They can check your circumstances and search for a more competitive contents insurance policy for you.
Other considerations for your contents insurance
Check the inclusions and exclusions of your contents insurance policy carefully as not all insurers offer the same features. Some insurance providers, for example, offer cover for matching sets, such as a set of chairs or a suite. This can be full cover so that they’ll pay for the replacement of the entire set if one item is damaged and a replacement can’t be found. Alternatively, they may offer restricted cover, such as paying for that item and compensating you for part of the cost of replacing the other items.
You may not be covered if you leave your property unoccupied for a certain time, such as 30 consecutive days. If you’re going to be away for longer than the insurer’s specified unoccupancy period, you should notify them in advance and ask a family member or friend to routinely check the property while you’re away. That way, the insurer may provide an extension to their unoccupancy period so that your cover remains intact.
Review your contents insurance policy
It’s important to review your policy every now and again to ensure you have adequate cover. For example, you might have bought some new furniture or an item that exceeds the single article limit since your cover started. Also, think about whether it needs to be reviewed after a special event, such as a birthday, a wedding or Christmas. Many insurers provide extra temporary cover at these times so check the terms of your policy to see if this is the case and whether this additional cover is free or will increase your premiums.
If you’re moving home, be sure to notify your insurer beforehand. Many insurers continue your cover during the move provided that you use a professional removal firm. Some can also transfer your cover to your new property but you need to check this.
Financially protect your belongings with contents insurance
You may not have given much thought to insuring your belongings but have a look around at the items you own and think about how much it would cost to replace them if something unforeseen happened. At Trinity Finance, we help to ensure the right amount of cover is in place so that you’re not left facing a huge expense should an unexpected event occur.
Our mortgage and protection advisers – located throughout Kent, London and Edinburgh – can explain the different types of cover available as well as the optional add-ons you can choose from to help put the best contents insurance in place for your needs. Just give us a call on 01322 907 000 to speak with one of our expert consultants. If you prefer, send an email to us at firstname.lastname@example.org or an enquiry via our contact form. As well as arranging your contents insurance, we can organise your buildings insurance either as a separate policy or in a combined home insurance policy. We also offer a range of other mortgage and protection services to financially protect you and your loved ones.