Contents Insurance
Home insurance is the source of many a headache for a lot of people, but, no matter how laborious a task arranging it may seem, it is nothing in comparison to the heartache a lack of home insurance can cause.
Home insurance can include both buildings insurance and contents insurance; we are going to simplify things by taking a look at each in turn.
Contents Insurance
Contents insurance is an absolute must for both homeowners and tenants; it covers the values of your possessions in the event of damage, destruction or loss. Contents insurance generally covers items such as electrical goods and appliances; clothing, shoes and accessories; CD’s and DVD’s; antiques and jewelry; photographic and musical equipment; and luggage and sports equipment as well as all non-permanent fixtures.
As with buildings insurance, the sort of incidents that contents insurance can cover you for include:
Accidental damage is usually not covered, but contents insurance policies can be extended so that it is covered (always check though, as some policies do cover this). Further cover will also be needed for: personal possessions that you carry on you outside of the home, credit cards, bycycles, caravans, accidental damage to carpets, replacement keys.
Items of high value, over £1000 for instance, may require an extra premium or need to be insured separately. Be sure to discuss this with your prospective insurer.
These policy extensions, especially accidental damage cover, are a good option for individuals or couples with children or pets.
How much should you insure your possessions for?
You should be sure to insure your possessions for their full worth; under-insuring will lead to you receiving less in your payout. This is because contents insurers use a technique called ‘averaging’; the average households contents are worth around £45,000 pounds but the average sum insured is usually around £35,000, this difference is calculated as a percentage, which will be deducted from any claim that you make. An online contents insurance calculator will help you get an accurate idea of how much cover you will need. You’ll be surprised how quickly it all adds up, even those of us who think they live lightly!
It is important to recalculate the value of your household contents every so often. New purchases should be taken note of and declared to your insurers, who will then amend your policy; failure to do so my invalidate your contents insurance or lead to losses in claims due to averaging.
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