Contents Insurance – Check Your Cover
It can be a daunting task to try and work out in your head how insurance works, what the benefits are, and how much it will cost. But before just picking one at random, you should check that you are properly covered for the contents of your home. This article will give you a thorough grounding in what contents insurance is all about – and why it's so important.
...and that's not all! We've also got top tips on how to save money on contents cover, whether you're renting or buying; plus we've even thrown in a few examples of when the pounds really do add up with this type of policy.
Contents insurance – a quick summary
Insurance is designed to protect you from any financial loss should the worst happen. And in the event of theft or fire damage, it could be your only lifeline if you've been burgled, had your bike stolen or lost everything in a house fire. Without it, you're on your own! That's why it's so important to get the right insurance and make sure your belongings are covered.
Contents insurance is designed to protect your household belongings – everything from jewellery and clothes to kitchen appliances and tank tops. In general, this type of policy can be divided into two main sections: the house content section, and personal possessions section.
For most people, house contents will include such items as furniture and fittings, carpets and flooring, curtains and blinds, household appliances and kitchen equipment. Personal possessions will typically include domestic appliances (washing machines etc.), clothing (including jewellery), electrical equipment (DVD players etc.), books/magazines/CDs/DVDs/computer games etc. Quite often, mobile phones and laptops will also be included in contents insurance, but it's worth checking the small print to make sure.
The house content section can have different names; make sure you check which is correct when you buy your policy. In some policies, the house content section is known as 'dwelling' or 'residential', whereas in others it's known as 'building'. It's worth knowing what this word means – otherwise it could cause a few hassles if anything goes wrong!
Contents insurance – terms and exclusions you should be aware of
As with any kind of insurance policy, there are terms and conditions that you should read before signing up for a plan. Always thoroughly read and understand exactly what the plan is designed to cover, as well as what it's not designed to cover.
Don't be afraid to ask your insurer if you're not sure – they should be able to give you some idea of what things are covered and what they aren't. It's particularly important to know whether your belongings are insured while they're away from your home; also make sure you know whether anything smaller than a specified value will be excluded.
Also make sure you distinguish between the house content and personal possessions sections of the insurance policy, as there are some important differences between them:
Contents insurance house contents section
Essentially, this covers the building structure (walls, roof etc.); any improvements made to the property (fixtures and fittings); and the items you use for your home business (desk, printer etc.). So if you've just moved into a new house, or made some improvements to your current home, it's worth checking what exactly is covered under the building section of your policy. You might need to add some extra cover if you have things like solar panels or air conditioning units fitted; check with your insurer as soon as possible after making changes.
Contents insurance personal possessions section
This covers individual items that belong to you – so anything smaller than a specified limit will be excluded. In most cases this will include things like mobile phones and laptops, video games, jewellery and watches. However, it's worth checking with your insurer as to exactly which items are included within this part of the policy.
Details that you need to know before buying a policy
To help you find the right cover, here are some important details that you need to know:
The cost of the plan
Most people tend to buy their insurance from the same place where they get their home loans or mortgages – but you can also buy them from specialist independent companies; so shop around for a deal that suits your budget. But be warned: Find out exactly how much you'll pay for the policy. Don't just assume that it's going to be one price for your house and another for all your other possessions – many policies can have separate prices - so check before you buy.
The cost of the policy – plus extras
Don't forget to include any extra cover, such as where you live abroad or in a foreign country, before you make a decision about which policy to buy. If you live abroad, this will cover you while you're away from home; and if you go to a foreign country, this is also designed to protect your belongings from any damage caused by theft or fire while they're away from home.
This is quite a complex area, so make sure you get your quotes from more than one genuine company. There are a lot of dodgy companies out there, and it's important to be careful when it comes to buying insurance.
If you're renting your property, the contents insurance company should handle any repairs made to the property – but this is where things can get complicated. It's not uncommon for tenants' contents insurance policies to be 'excluded', which means that they won't cover their personal possessions, like jewellery or mobile phones. However, all they have to do is check the small print and make sure there isn't anything included in their policy that could potentially cause problems.
It's also worth checking whether the cost of the insurance policy will alter depending on how many possessions you have. Many policies place a limit on your belongings, and if they find out that you've been over-insured – or have more personal possessions than stated in the contract - they could penalise you by charging more for the accident and emergency cover.
However, it's important to note that if you buy contents insurance at a later date but your insurer finds out that you actually own more things than were originally declared, there is generally no problem with asking them to increase your cover. In these situations, they should be able to give you a better deal – as long as there are no other issues with your policy.
You might also be able to ask your insurer for a reduction in the amount of contents insurance you have – or a better deal on the policy altogether – if you save money on your property maintenance costs. This is only usually possible through some kind of reduction in premium, however.
Insurance companies also set certain limits as to how much they will pay out if you're involved in a motor accident or fire at home. So it's important that you check exactly how much they will pay in the event of an accident; and what sort of extras, such as legal fees and medical expenses, will be included with this payout.
Conclusion
When it comes to insuring your possessions, there's a whole range of things you should be aware of. Be sure to check what your policy covers and what it doesn't cover; and make sure you get all the information you need before taking out a policy. If you have any questions then it's always best to ask your insurer as soon as possible before signing anything - and don't forget: Insurers are notoriously tricky when it comes to putting their customers in difficult situations, so make sure you read the small print of your policy carefully.
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If you would like some tailored advice, please ask our team for further details. Alternatively, call head office or email talktous@codelife.