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Contents Insurance |
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you afford to replace everything you own if it was lost in a fire
or stolen? Home Contents Insurance offers protection against the replacement
cost that you would otherwise have to pay to replace the contents
of you home in the event of them being lost, damaged or stolen. It
covers just about everything you would take with you if you moved
home – furniture, clothing, jewellery, household goods (this
may even include frozen food), kitchen equipment, televisions, computer
and audio equipment – basically everything that is not considered
to be part of the structure or fabric of the home itself. Contents
Insurance used to just protect the contents inside your home although
nowadays many policies also cover items outside your home, such as
items in your garden (for example, bicycles, BBQ equipment etc). When
you take out a Contents Insurance policy, you need to make a list
of all items that you wish to be covered by the policy, and also their
value (hence you will probably need to keep receipts of your purchases,
especially those of value). If you own a lot of valuable items you
may wish to add extra cover as most Contents Insurance policies will
offer limited cover for valuables, up to a certain amount.
The policy will cover you against most events, similar to those covered by Buildings Insurance. These include fire, explosion, lightning, earthquake, subsidence, heave or landslip. Also damage caused by storm or flood, falling trees or branches, escape of water from tanks or pipes, escape of oil from heating systems. You are also covered for theft or attempted theft, riot, civil commotion, strikes, labour or political disturbances, breakage or collapse of television, radio signal or satellite apparatus, impact from vehicles or animals, impact from aircraft or things falling from them (and other aerial devices). As with most forms of insurance some policies will cover you against more circumstances than others so make sure you are fully aware of exactly what is and what is not covered. Some policies even protect your frozen food. Say you have a freezer full of food which then breaks down. Regardless of how quickly you can get someone out to repair your freezer, it is like that your frozen food will by that time by thawed out and will probably go to waste. Some Contents Insurance policies will now cover your frozen food up to a certain amount although you may have to pay a little extra in your premium (bear in mind that not all policies offer this cover). There are two main types of Contents Insurance: ‘Indemnity’ and ‘New for Old’. Indemnity is usually the cheapest policy; if you should make a claim on your indemnity policy a deduction will be made from you claim payment to account for wear, tear and depreciation of the damaged items. For example, if your 6 year old sofa is ruined due to leaking water, the pay out would reflect the age of the sofa. So although the sofa may have cost you £2000 six years ago, don’t expect to get the same value from your payout. However, if you had a New for Old policy and your 6 year old sofa was ruined, than the policy will pay out the full cost of a brand new sofa to replace the old one. New for Old policies cost a little more than Indemnity, however the pay out is usually greater as it will replace your items without making any deductions for age/wear/tear. Indemnity policies will usually pay you cash whereas New for Old policies will usually replace the item with a new one. More recently, there is another policy becoming more popular, this policy has a premium which is calculated on the number of bedrooms in your house. Many people find this type of policy more convenient as you do not need to work out the total value of your possessions. Most Contents Insurance policies are seen as an agreement between you and the insurance company and hence places legal obligations on both parties. The insurance company agrees to cover you against legal liability, and loss or damage to your possessions. In return the policy holder and members of their household must keep the insured possessions in a good state of repair and take all responsible steps to prevent injury, loss or damage, for example, by fitting burglar alarms, making sure windows and doors are locked when they leave the property, etc. As with any form of insurance be sure you understand exactly what is and isn’t covered before you buy the policy, always read the small print! Cheaper cost could mean less cover. Most insurance companies will offer a cooling down period in which you can cancel your policy should you change your mind. |
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