A Guide to Home Insurance & Saving with Online House Insurance Quotes
Contents Insurance
Anything that you would usually take with you when moving house should be covered by contents insurance.
Whereas buildings insurance covers the actual structure and fabric of the house, contents insurance covers the impermanent structures and fixtures of the house as well as the contents.
Contents insurance is often sold together with house insurance, although this need not be the case. It is perfectly possible to buy house insurance from one provider and contents insurance from another. In practice, homeowners often find it convenient to buy buildings and contents insurance together and a discount may sometimes be offered for so doing.
Owner occupiers and landlords will require buildings insurance, although tenants usually only need to consider contents insurance. Contents insurance may however be important to landlords renting furnished accommodation.
Many contents insurance policies operate under a so-called new for old basis whereby lost or damaged items are replaced with brand new ones. This belt and braces approach certainly offers greater peace of mind so it is important to check with the insurer if this is the case.
Contents Policy
Contents policies will include insurance cover for the same eventualities as those for buildings insurance, including damage caused by fire and smoke; lightning and explosion; earthquake; storms, floods and water leakage; riot and vandalism; theft; falling trees or branches; subsidence and heave; and, impact damage from vehicles and aircraft. In addition can be added these important categories
- Accidental Damage
- Accidental Breakage
Where accidental damage or breakage are excluded they can be added in the form of an extension to the policy.
Whilst cover may be provided for accidental damage to items in the home, it may not include damage sustained during cleaning, repair or restoration of those same items. Damage or loss resulting from acts of vandalism or theft involving family members may be excluded. Bear in mind also that, unless specified in the policy document, you may not be covered for loss or damage to items outside the home, for example in the garden, drive or car.
As with buildings insurance, the policy documents must be read with great care and attention. Be aware of the significant exclusions that will apply to every policy. For example, you may not be covered at all for any loss or damage that occurs when a property is left unoccupied for a specified consecutive number of days. Damage due to wear and tear, or resulting from electrical or mechanical breakdown are not usually covered. Also not covered are damages caused by gradual processes like rot, rust or mildew.
It is a good idea in general and may also be a specific requirement of the contents insurance policy to lock by key all windows and doors when you leave the house.
A contents insurance policy should also include cover for third party injuries sustained whilst in your home. Such cover is vital as a claim against you could potentially be very high.
When it comes to moving house its worth checking that your contents are covered whilst in transit - many policies offer this protection as standard. If not, the policy can be extended and/or the remover may offer additional insurance.
Most insurers offer cover for possessions outside the home. Whilst this may extend to the drive and garden as standard for certain items, additional cover may be offered in the form of personal possessions cover.
Maximum Total Value
Ideally it is safest to have contents insurance cover for the maximum total value of all the items in the house. This will avoid the pitfall of being under insured. For example, say the contents of a house were insured for a total of £10,000, usually referred to as the sum insured, although the actual value of all the contents came to £20,000. In the event of loss or damage to an item or items to the value of say £1,000, the insurance policy would only pay out £500. It is therefore important to check that the sum insured accurately reflects the total value of the contents of the house or property to be insured.
Typically contents insurance policies are index-linked meaning that every year the insurer will raise the sum insured in line with inflation. Be aware that if you buy high value items it is necessary to inform your insurer to avoid the risk of being underinsured.
The simplest way to calculate the maximum total value, or sum insured, is to make a list of all the contents of each room in the house, including the less obvious items like carpets and curtains, and then work out the total cost of replacing every item on the list with the same or equivalent new items.
Keep in mind also that there will be a maximum limit for single items. Items with a value that exceeds this maximum limit, such as jewellery or antiques, are better insured seperately.
Valuable belongings, often referred to as high risk items, should therefore be named and itemised as part of the contents insurance policy document and adequately covered. Recent valuations and receipts must be kept in a secure place with copies kept away from the property insured.
A list of valuers who will carry out more precise valuations for insurance purposes can be obtained from the Incorporated Society of Valuers and Auctioneers. It is usual for insurance valuations to be double sale values for antiques, fine art and collectables, and higher for rarer items. This reflects dealer costs and the amount you might have to pay to replace the item, rather than what you would expect to get for it at auction.
Specific or additional coverage for credit cards and mobile phones can be arranged as part of the contents insurance.
Contents insurance cover may be provided in different ways. With indemnity insurance for example the insurer reduces the amount of any claim for lost or damaged items to allow for depreciation. With 'new for old' cover the insurer will pay the full cost of repair or replacement with new or equivalent items.
Reducing the Cost
Its quite possible to reduce the cost of contents insurance by taking a few simple measures, which are in any case well worth the effort. Smoke detectors should be fitted and maintained in working order. To reduce the risk of theft consider fitting a burglar alarm and upgrading door and window locks. If there is a local Neighbourhood Watch Scheme it is worth joining; if not consider starting a new scheme.
Contents insurance premiums can be reduced by fitting British Standard Approved locks to all external doors. The British Standard Kite Mark is evidence that the locks have passed rigorous tests. On external doors consider fitting five lever dead locks as well as a night latch (Yale type lock) on the front and back doors. Patio doors or French windows should typically be fitted with five lever sash locks. Windows are ideally secured with two bolt-type locks.
Discounts to premiums may be offered where an intruder (burglar) alarm has been fitted by a NACOSS Recognised Firm. NACOSS is a division of the National Security Inspectorate, the body responsible for regulating the electronic security industry. A NACOSS fitted alarm should comply with the relevant British Standards.
Smoke alarms should be fitted throughout the property and certainly at the top of stairwells, in hallways and on landings. Ensure that smoke alarms carry the British Standards Kitemark. Smoke detectors should be checked regularly and batteries, if required, replaced as necessary. Consider purchasing fire extinguishers and keeping them in easily accessible locations.
In certain cases it may be worth considering foregoing a claim on your policy if the insurer operates a no claims discount scheme. As with motor insurance, building up a no claims discount can lead to significant savings on contents insurance.
And Finally...
Finally, no decision about contents insurance should be based on the cost of the policy alone. It is important to find the right insurance quote for every individual situation; this can only be done by considering all the variables involved. It is important first to decide what level of cover you require and then to always compare like for like when choosing between different house insurance quotes.
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