Whether you’re a homeowner or renting, renewing your contents insurance is an annual chore you really shouldn’t forget. Contents insurance offers you the peace of mind that you’ll be able to replace your belongings should the worst happen and you’re the victim of burglary, fire or flood.
Before you take out a new policy, or renew your old one, it’s worth having all the facts about contents insurance policies and being clear about the level of cover you need. Read on for a quick guide to all things insurance.
What is home insurance?
Home insurance is the umbrella term for buildings and contents insurance.
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.
As with 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.
If you’re buying with a mortgage, your lender will require you to take out buildings insurance. You’re under no similar obligation to have contents insurance. But if you’re thinking of doing without it, consider how easy it would be to replace, perhaps £50,000-worth of home items in one go!
You can buy buildings and contents insurance separately, however, most insurers will offer joint cover as standard. Many insurers will also give you a discount if you get both your contents and buildings insurance from them – sometimes as much as 40%.
If you are renting, your landlord is responsible for insuring the building and any furniture and appliances, which they provide. You will need to take out a contents insurance policy of your own for anything you bring to the rental home.
What does contents insurance cover?
Contents insurance usually covers everything in your home that isn’t nailed down – so all furniture, kitchenware, bedding, clothing, electrical goods, antiques and jewellery. Every policy is different, but you’ll usually be covered for theft, fire and flood.
You won’t be covered for damage caused by normal wear and tear. There may be other exclusions too – damage caused by a computer virus, for example.
Some policies include accidental damage of your belongings, but you may need to pay extra for this. Check before you buy.
Personal possessions cover
Personal possessions cover is often included in home contents policies. Again, check whether this is the case. This means that valuable items such as laptops, cameras, mobile phones and jewellery are covered when you take them out of the home. Some policies may even cover you when you take these items abroad. Your policy may cover your family bicycles too.
There will usually be a limit on the total amount you can claim for these items as well as a limit for each individual item – unless you pay a higher premium to increase your cover.
With most policies, cover on personal possessions is limited to £15,000 with a £1,500 cap on each individual item. If you have expensive possessions – an engagement ring, high-spec bike or inherited work of art, for example, you will need to buy additional cover.
Your standard cover might include the cost of replacing your mobile but some policies include a big excess for pricier phones – particularly iPhones.
And while the insurance may cover the device, it won’t necessarily meet the cost of replacing paid-for downloaded films, books or music, so check whether your policy covers digital information.
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.
Getting the right level of cover
The insurer will usually calculate the amount of cover you need based on the number of bedrooms in your home. Most of these ‘bedroom-rated’ policies will provide you with between £40,000 and £50,000 of cover.
Think about how much it would cost to replace the items in your home, as well as the cost of your most expensive belongings, to see whether this level of cover is adequate. There are many online contents calculators you can use to help you, such as this one on the Which? website.
Less common are ‘sum insured’ policies, where you are responsible for calculating the total amount of cover you need and ‘unlimited sum insured’, where there is no limit on your cover.
Many policies will offer you ‘new for old’ cover – meaning you’ll receive enough money to replace your stolen or damaged items with new ones.
Some policies, however, will offer you ‘indemnity cover’– which means you’ll only receive the current value of the items. These policies may have cheaper premiums but could end up costing you more in the end.
Watch your excess
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.
Many policies include extras, others allow you to add these on before you purchase. Sometimes insurers will offer these benefits for free to encourage new customers to take out a policy.
Legal cover – which offers advice or even pays court costs if you’re involved in a dispute.
Accidental damage – to cover you for breakages and paint spills, for example.
Home emergency cover – for your plumbing, heating and other home emergencies.
Three things to do before you buy
1 Shop around – makes sure you get a few quotes. Using comparison sites might make this easier. Never renew an existing policy without checking, as many insurers offer big discounts for new customers. The insurer you choose should be authorised and regulated by the financial conduct authority.
2 Get the right level of cover – make a rough valuation of your belongings to be sure you have sufficient cover, but also that you aren’t paying for a level of cover you don’t need. Be especially careful to value precious and expensive items.
3 Read your policy carefully – to make sure that all the information you’ve given is accurate and the policy is right for you. Otherwise, you may have a claim refused.
If you’re looking to buy or rent a property in Wimbledon Village, please give us a call. We can show you the properties we currently have available and talk you through any aspects of the moving process which you’re unsure about.