There are two types of
home contents insurance – the ‘bedroom rated’ and ‘sum insured’ policies. With the bedroom-rated type your premiums are worked out from the number of bedrooms you have. With the ‘sum insured’ you have to go round your home, add up the value of all items in each room and then add the totals together. The grand total is the value of your personal possessions.
Whichever type of policy you go for, you will also need to record the value of important items like wedding and engagement rings and other jewellery. These may need to be specified as named single items on your home contents insurance – always check this. Home contents insurance should also provide you, as the occupier of the property, with a certain amount of cover for
liability for accidents that happen to others while in your property.
Standard home contents insurance is normally either
‘indemnity’ or
‘replacement as new’. Indemnity policies are the cheapest because, when you claim for damage or loss of an item, you will have to deduct a certain amount from your claim for wear and tear. The older the item is, the more that you will have to deduct from the value of your claim. ‘Replacement as new’ policies, on the other hand, have higher premiums but allow you to claim for the full cost of replacing or repairing an item that has been damaged or stolen.
There are various different types of
additional protection available for an extra premium if you are unhappy with the basic level that your contents insurance affords. These include
accidental damage insurance that covers your property in case of mishap. For example, if you spill paint on your carpets while redecorating.
If you wish to cover items like cameras or sporting equipment that regularly leave your home and so are at a higher risk of theft then you should consider an
‘All Risks’ extension to your home contents insurance. All items you wish to include should be listed under the ‘All risks’ section of the policy. If you wish to insure high risk items like bicycles or caravans that spend a great deal or all their time outside your home then you will probably need to take out, and pay for, specific extensions to your
home contents insurance.
Insurance companies may require that you take added security measures to reduce the risk of burglary before they insure you. If you already have good
security, in particular an alarm system, it can be worth mentioning this to your company – you may end up with cheaper premiums.
If you
work from home, some insurers now offer extensions to contents cover that are cheaper than buying separate business policies.
