WHAT IS CONTENTS INSURANCE?

How does contents insurance work?

Contents insurance is there to help you financially if your valuables are lost or damaged due to events like fire, theft, or flooding.

It’s designed to cover all your personal belongings that aren’t physically part of your home’s structure. This means things like your furniture, electronics, clothing, and other items you own are protected against the cost of loss or damage.

While buildings insurance covers the physical structure of your house and its permanent fixtures, contents insurance focuses on what’s inside.

You can purchase contents insurance separately or as part of a joint home insurance policy that includes both buildings and contents cover.

What does contents insurance cover?

Contents insurance policies can differ, but they generally cover:

• Clothing.
• Furniture.
• Jewellery.
• Electrical goods like TVs and computers.

These items are usually protected against risks like theft, fire, and flood. However, coverage for accidental damage to these items is often an optional add-on.

Additionally, you can opt for ‘Personal Possessions Cover’ at an extra cost. This extension covers items you take outside your home, such as:

• Laptops.
• Cameras.
• Jewellery.
• Handbags.
• Mobile phones/tablets.

Some policies even extend this coverage internationally, so if you lose or damage these possessions while abroad, you can claim them on your contents insurance. Remember, adding this global coverage and accidental damage protection typically means a higher premium.

What contents insurance doesn’t cover

Contents insurance doesn’t cover certain aspects, including:

• Wear and tear over time.
• The structure of your home, like walls and the roof, which are covered under buildings insurance.
• Fixed fixtures and fittings, like a fitted kitchen, but freestanding appliances like a washing machine are usually covered.
• Damage to computers caused by a virus.

Most policies also set limits on the value of possessions they’ll cover. This could be a cap on a single item’s value (often around £1,500) or a total limit for all valuables. For very expensive items, like artwork, jewellery, and high-end audiovisual equipment, you might need to arrange additional cover or pay extra to include them in your policy.

What types of contents insurance are there?

Contents insurance comes in three primary types:

• ‘Bedroom Rated’: Here, the insurer determines your contents cover amount (the ‘sum insured’) based on the number of bedrooms in your home. These policies often provide standard cover ranging between £40,000 and £50,000. This is sufficient for many homes, but it’s important to ensure it adequately covers all your possessions.
• ‘Sum Insured’: In this type, you are responsible for calculating the amount of cover you need. It involves assessing the value of all your possessions and ensuring the sum insured covers their total replacement cost.
• ‘Unlimited Sum Insured’: This policy offers comprehensive coverage without a set limit, ensuring you’re not under-insured.

For those with a ‘sum insured’ policy, there are a couple of ways to determine your coverage needs:

1. Use an online contents calculator, commonly available on comparison websites, to estimate the total value of your possessions.
2. Alternatively, make a detailed inventory of everything you own and tally up the replacement costs at today’s prices.

Do I need contents insurance as a tenant?

While your landlord’s insurance covers the building and permanent fixtures, it doesn’t extend to your own items. This means in cases like a fire or burglary, your belongings won’t be protected under the landlord’s policy.

Whether you’re renting an entire property or just a room, contents insurance can safeguard your personal items. Keep in mind that if your landlord has contents insurance, it likely only covers what belongs to them, like provided furniture or carpets.

If you’re a lodger (renting a room in a landlord’s home) or sharing with non-family members, the cost of insurance might be higher due to the increased risk from more people coming and going.

For those sharing a house, consider discussing with your housemates the possibility of getting a joint contents insurance policy to cover all your possessions collectively.

How to cancel contents insurance

To cancel your contents insurance policy, you can contact your insurer at any time, but there are a few considerations to keep in mind:

• If you cancel your policy partway through the year, you won’t receive the no-claims bonus for that current year.
• Most insurers charge a cancellation fee, although this is typically waived if you’re cancelling at the time of policy renewal.
• If you’ve paid your premium upfront and haven’t made any claims, you’re entitled to a refund for the unused portion of your coverage, minus any applicable cancellation fees.