We look at contents insurance and why it's key to have it in place to protect your belongings
If your home is hit by fire, flood or burglary, it’s important to have the right insurance cover in place to put things right.
Home insurance is there to protect your house and your belongings. There are two types of policy:
1.Buildings insurance covers the structure of the house and any permanent fixtures inside it. If you needed to rebuild some or all of your house you would claim on this.
2.Contents insurance is for your belongings. Generally it’s what could go in the removal van if you moved house, plus things such as carpets and curtains.
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What is covered by contents insurance?
Having to replace everything in your house could run into the tens of thousands of pounds.
This is where contents insurance comes in. A contents insurance policy will allow you to replace your stuff should it be stolen or damaged by fire or water.
Typical things covered by a contents insurance policy are:
- Floor coverings – carpets and rugs
- Furniture – tables, chairs, sofas, beds and wardrobes
- Soft furnishings – curtains and cushions
- Electronics – TVs, laptops, phones and games consoles
- Appliances – ovens, hobs, fridge freezers, washing machines and microwaves
- Eating and drinking – utensils, cutlery, china, glasses, food and drink
- Valuables – jewellery, art and ornaments
- Sport and leisure – sports equipment, bikes, computer games, books and toys
- Garden and DIY – garden furniture, mowers, ladders, hot tubs and tools
- Linen – towels and bedding
- Clothes and shoes
How does contents insurance work?
There are two types of home contents insurance policies: indemnity and new for old.
Indemnity insurance takes into account wear and tear on your belongings. So if a leak ruins your six-year-old rug, the payout would be enough to buy another six-year-old rug.
But if you have new-for-old contents insurance your payout would be enough for a brand new rug.
Because new-for-old payouts are generally higher, these policies tend to cost more than indemnity insurance policies.
Do I have to have contents insurance?
No. Mortgage lenders will usually require you to have buildings insurance in place but contents insurance is entirely optional.
But contents insurance cover is a sensible idea. Could you afford to replace everything in your house in one go?
How much contents insurance do I need?
The simple answer? Insure your belongings for what they are worth.
Ideally you want to have enough cover in place so that you could replace everything you own should something unexpected happen to your home.
To get a total, go room by room and add up the items. And don’t forget what’s in the loft, the garden, the shed and the garage.
An easy way to keep track of the total is to use our contents calculator.
Be thorough and try to be as accurate as possible. Valuing items too low could mean you not being able to replace them properly.
Valuing them too high could mean paying higher premiums than you need to.
And don’t forget that lot of individual things quickly add up.
If you’re a keen cook, for example, you may well be surprised at how much your kitchen equipment and cookbook collection come to.
If you have children, don’t underestimate how much their toys, video games and sports equipment would cost to replace.
All the stuff that babies need doesn’t come cheap either. Some buggies alone can cost £1,000.
And those bits that were used once and then forgotten about, now is the time to remember them and add them to the total.
There will often be limits for categories and high-value items will need to be listed separately.
High value items are typically those worth £1,000 or more. This could be things such as jewellery, bikes and computer equipment.
Contents insurance if you work from home
Many more of us are working from home these days.
And if you work from home you may need more than basic contents insurance.
If you’re an employee and working from home means sitting at the kitchen table with the office laptop, you probably don’t need extra insurance. Your employer’s insurance will likely cover the laptop.
But if your work isn’t just desk - or kitchen table - based, or you work for yourself, it’s best to check the wording of your home contents insurance.
Does it cover the things you need to do your job? If not, some insurers will offer extra work-from-home cover as an add-on.
Do people visit you at home as part of your work? You’ll need to make sure that you are covered for any eventualities here as well.
Should renters get contents insurance?
If you’re renting your landlord should provide the buildings insurance. It’s then up to you to decide whether you want to take out insurance to cover your possessions.
If you take out tenants insurance it can also cover you for damage to things your landlord owns and so help you keep your deposit. Look out for policies that include tenants’ liability cover.
Should students get contents insurance?
You may assume that everything you take to university is covered on your parents’ contents policy. This is not always the case.
If you find that your parents’ insurance doesn’t do what you need it to do, it could be worth getting your own policy. There is contents insurance designed for those living in student accommodation.
Is my bike covered by my contents insurance?
It will depend on how much your bike is worth. If it’s an old battered bike it’s probably going to be covered generally by your contents insurance.
But insurers set a limit on how much they will cover bikes for. Above this and your bike will have to be specified as a high-value item on your policy.
Depending on the circumstances you may be better off getting a stand-alone bicycle insurance policy.
Am I covered for damage caused by my pets?
If your dog destroys your sofa or sends your favourite vase flying this is unlikely to be covered by a standard contents insurance policy.
If you want cover for any damage your pets may cause your belongings you’ll need to look at accidental damage insurance.
This is usually an add-on to a contents insurance policy. What’s covered will depend on the policy.
Check that the add-on is appropriate for the type of damage your think pet could cause before you take it out.
Accidental damage cover is a good idea generally. It’ll cover you for things such as red wine spills and the felt-pen drawing that mysteriously appeared on the sofa.
Can I get buildings and contents insurance together?
Yes. If you’re a homeowner then combining your buildings and contents insurance may work out cheaper than getting two separate policies.
Compare home insurance quotes for buildings and contents insurance combined and two separate policies to see what works out best for you.
Can I get a no claims discount on my contents insurance?
Home insurers do offer no claims discounts. You can also pay to protect this no claims discount. This means that you can still claim and keep the discount, although conditions will apply.
Extra cover for your contents
You can usually add on extra bits that don’t come as standard to your contents insurance cover.
The most common extras are:
Accidental damage cover – in case you drop your iPhone down the toilet or launch your remote control into the television.
Legal expenses cover – can cover legal costs for things such as employment disputes, personal injury cases and boundary disputes.
Home emergency cover – gives quick assistance for things such as burst pipes.
Personal possessions cover – for lower value items that you take out of the house, your GoPro for example.
What is an excess?
An excess is the part of a claim that you pay yourself. So if you claim £500 for a stolen item and have a £100 excess, your insurer will give you £400.
Check the exclusions
Exclusions are things that the insurer won’t pay out for. Common examples are wear and tear and damage caused by pets.
So if your dog is particularly fond of chewing your furniture you’ll need an add-on that covers you for this.