Are you wondering if you need contents insurance? Perhaps your policy is up for renewal, and the cost seems like an unnecessary expense. This easy guide will help you understand how contents insurance works and what it covers and does not cover.
What is home insurance?
Firstly, home insurance is a general umbrella term for buildings and contents insurance. Here’s a quick guide as to which each section tends to cover;
Contents insurance – covers your possessions, such as TVs, furniture and clothes, against loss or damage in the home.
Buildings insurance – covers the structure of your building and its permanent fixtures, such as kitchens and bathrooms.
You can buy buildings and contents insurance separately; however, most insurers will offer joint cover as standard. Most insurers will also offer a discount if you choose to get both insurances from them.
Did you know that you can get contents insurance even if you’re renting?
If you are renting, your landlord is responsible for insuring the building and any furniture and appliances, which they provide. However, we strongly advise for any tenants to take out a contents insurance policy for their own possessions that they may bring to the rental home.
Is it compulsory to insure my contents?
If you’re buying your new property with a mortgage, your lender will require you to take out buildings insurance. However, you’re under no obligation to have contents insurance; but try and think about how you would financially afford to replace, perhaps £50,000 worth of home items in one go!
What does contents insurance cover?
Home contents insurance covers you against loss, theft or damage of your personal and home possessions. This generally includes:
- Furniture – sofas, dining tables, beds and wardrobes
- Electrical goods – TV’s, computers, tablets and games consoles
- Soft furnishings – curtains and bedding
- Clothing and jewellery
- Toys, ornaments and antiques
However, it’s important to remember that every policy is different, but you’ll usually be covered for theft, fire and flood.
What contents insurance doesn’t cover
There are a number of things that aren’t covered by home contents insurance. Depending on your policy, things that may not be included are:
- Damage caused by normal wear and tear
- Damage caused to a computer by a virus
- Loss of digital information such as replacing paid-for downloaded films, books or music
- The structure of your home, including permeant fixtures and fittings such as kitchens and bathrooms. This would be covered by buildings insurance.
With most policies, cover on personal possessions is limited to a cap on each individual item. Therefore, if you have expensive possessions, such as an engagement ring, high-spec bike or inherited work of art, you will need to buy additional cover.
We always recommend that you make sure you understand all the terms and exclusions of your policy before you buy. Read your documents carefully and query anything you aren’t sure about.
How much does it cost?
This is the most common question we receive during our protection consultations; and the cost of insurance policies varies widely depending on the amount of cover you require and your excess. However, home contents insurance can be a lot cheaper than you think! According to the Association of British Insurers (ABI), the average cost of a contents only insurance policy is £59.22 per year and a combined home and contents policy is £161.75 per year!
Another benefit is that just like car insurance, the longer you go without making a claim on your home insurance; the higher your no-claims discount will be, meaning your premiums will be lower.
Most policies come with an excess, meaning you will need to pay a proportion of any claim. Generally, cheaper policies have higher excesses but may allow you to vary the amounts for an additional charge.
Ready to get started?
Here at The Residential Mortgage Hub we can help you protect what’s most important to you and your family, whether it be life insurance, income protection or contents cover. Our team will also take into account or review your existing protection products to put together a suitable plan to cover the important financial risks and talk through our recommendations. Please don’t hesitate to get in touch for further protection advice or request an appointment here.
