Here at Barfield Financial Advisors, we strongly recommend taking out home contents insurance in order to cover your possessions against fire, theft and other risks, such as accidental damage. If something happens to destroy or damage any of your possessions, it can cost you a lot of money to replace those items, some of which may be essential.
We have put together a guide on what to expect when you take out home contents insurance and how to choose a policy, along with what problems you might come across when making an insurance claim.
What is home contents insurance?
Home contents insurance covers you against any sort of loss within your household such as, theft or damage to your personal and home possessions. It can also cover you if you take items out of the home when going on holiday.
Most insurance policies will not only cover your own possessions, but also possessions of close family members who are living with you. However, keep in mind that it may not cover the possessions of anyone staying with you temporarily.
Taking out home contents insurance isn’t mandatory. However, it’s a good idea to do so because if any of your contents are lost, stolen, or damaged you will have to pay the full price to replace them.
What should your policy include?
With a standard policy, it should cover damage caused by fire, flooding, storms, and theft. However, you may have to pay extra to cover accidental loss or damage to your possessions. This is worth considering if you have children or pets. However, always remember to check what’s included before proceeding.
It is likely that you will always have to pay extra to cover possessions that you take out of the home. For example, cameras, laptops, or jewellery, or to cover any particularly valuable item. Not all policies will cover the contents of a freezer or a mobile phone, and there may be an upper limit for a single item. This is why we always recommend thoroughly checking what your policy does include.
Most policies will carry an excess which means that you won’t be covered for the first few pounds of a claim, and therefore will be required to pay it yourself. The lower the excess, the better. A typical excess may be between £50 and £100.
Most policies offer ‘new for old’ cover. This means you get the full replacement cost of items that are lost, stolen or damaged. However, some policies will only offer you the amount that your items are currently worth if you need to make a claim. Again, make sure you know what your policy is offering to replace before you take it out.
Finally, some contents insurance can also pay a lump sum if you die from a fire, theft or accident at home. It can also cover you if someone is injured or dies when visiting you.
Problems with home contents insurance claims
- If you are underinsured, your insurer may only pay a proportion of your claim.
- There may be a limit on what you can claim for a single item and remember that you may have to pay an excess. Always look out for the excess amount.
- If you didn’t take out a ‘new for old’ policy, you will not be covered for general wear and tear to an item.
- Your policy may say that your insurer can provide a replacement item rather than the money to replace it.
- If one item in a set is damaged: for example, one chair in a set, you may not be able to find a matching replacement. If this happens your insurer should pay for the damaged item and an amount towards replacing the undamaged items.
For any further questions about insuring your home and its possessions, don’t hesitate to get in touch.