Contents Insurance covers just that, contents. It is designed to protect your belongings while they are in your house. It’s best to think of a disaster, say a fire, how much would it cost you to replace every single item in your home? You have to be practical and take the sentimental value out of the equation and just think of the actual value of jewellery, furniture and electrical items.
Now here’s the slightly confusing bit – most insurers operate under one of these two types of policy.
This is the most affordable type of contents insurance. Indemnity means that following some sort of disaster your items will be replaced at their current value including a depreciation deduction. So even if you’ve just paid quite a lot for something, it will only be worth what a valuer decides it’s worth. Indemnity cover will save you money in the short term but is likely to not provide you with enough funds in the event of an emergency.
Of course, everyone is different so, before you make a decision, have a trip around your house with a notebook and jot down the value of your most prized possessions and decide whether you could deal with getting these things second hand in the event of an accident. If you have any items in storage, check that your home contents insurance covers this too – you might find it doesn’t in which case you may need to give them a call or seek out alternative insurance through the storage company.
So, if you’re a homeowner with a house filled with moderate to expensive things then firstly, lucky you, and secondly, you’re going to have to make sure that you have a new for old content cover on your property. New for old means that you can replace your items you’ve lost with brand new shiny versions, no matter what the cost is. Although the policy may be slightly more expensive to begin with – it’s invaluable in the long run.
The most crucial aspect of contents insurance is to not undervalue your items in the first place. Be generous but also realistic with your estimate because it’s vital that you don’t end up out of pocket when it comes to restoring your house back to it’s original state after an accident. It is also important, when you’re adding things up, to consider the current value, for example if you bought something five years ago such as a laptop, it’s likely to cost less these days. Once you have worked out what’s best for you, consider getting professional advice on finding the best policy so you aren’t left short.