What is contents insurance?
Contents insurance, also known as home contents insurance, is taken out to cover the cost of replacing belongings in your home that may get lost, damaged or stolen.
What is protected with contents insurance?
The belongings you protect are things that can be found within your home but aren’t part of the home itself. For example:
- Furniture
- Kitchenware
- Electronics
- Clothing
- Décor
- Jewellery
- Medical devices
A good way to think of it is anything that you would take with you if you moved to a new house.
These should be personal possessions, so if you run a business from home or sublet, these items will not be insured.
Is there a limit to how much is covered?
There is often a limit to how many high value items you can insure, so prioritise your most precious possessions or take out separate insurance to cover high value items like musical instruments.
What does contents insurance cover?
Most contents insurance will only cover loss or damage to your belongings that is out of your control. The typical scenarios that contents insurance will cover are:
- Fire damage
- Theft
- Flooding damage
- Storm damage
What does contents insurance not cover?
There will be some things that your contents insurance will not cover but can be added as additional cover. For example:
- Protection for bikes or scooters
- Cover for belongings taken away from the home
- Protection against accidental damage
- Protection for high value items
Make sure to check the policy if this is something you are interested in. It can be useful if, for example, you have pets or young children who are partial to accidentally breaking things.
Contents insurance will not cover things such as:
- Fixtures and fittings
- Windows and walls
These will instead be covered by
buildings insurance.
Additional protection
While the basis of contents insurance is to protect the belongings in your home, it is possible to protect those items that you may take out of the home with you.
Items like laptops, phones, jewellery and bags that will leave the home when you go out, go to work or go on holiday can be protected by contents insurance using an ‘all-risks extension’.
Also known as Personal Possessions Cover, this is a policy (likely an add-on) that protects items from loss or damage incurred away from your property.
There are often restrictions on what items and situations are covered by an all-risks extension so be sure to read your policy carefully if you take this out.
Who needs contents insurance?
If you are a homeowner with expensive belongings or ones that are precious to you, it is a good idea to get contents insurance. Protecting everything in your house against any possible accidents is your responsibility once you own that home.
Do I need it if I rent?
If you are the tenant of a rented property, with belongings you want to protect, it may be worth considering taking out content’s insurance. However, there are things to consider in this instance.
If you get contents insurance for a rented property you share, being named on the policy will make you liable for any claims made by the people you live with, even if you were not involved in the claim. This will stay on your record and may affect future insurance premiums.
You can instead get contents insurance that pertains to just the items in your own room of the flat or house share. In this case you need to have a lock on your door, this will show that you are the only one able to access that room if you ever want to claim for theft. In this case you will also need some proof of forced entry.
If your rented property is furnished by your landlord, it is their responsibility to get contents insurance for that furniture, as it belongs to them. If the furniture is stolen or damaged, you must contact your landlord. You’re not able to make a claim, but they might decide to.
How much does contents insurance cost?
Like other insurance policies, such as car or buildings insurance, contents insurance will be paid in instalments. These can be either monthly or annually based on the policy you choose.
How much your insurance will cost depends on the items you are insuring and the kind of policy you have.
There are three main policy types:
Sum insured
With this insurance policy you will be paying based on the total value of the items you are insuring. So, it’s helpful to work out how much your items are worth before taking out this policy. There is also a limit on how many items you can ensure.
Bedroom insured
With this policy you will instead be paying based on the number of bedrooms the insured property has. This can be more expensive that sum insured, but often gives you more cover.
Unlimited sum insured
This policy is much the same as sum insured, but there is no limit to how many items you can ensure. Just remember that the more you insure, the higher the cost.
Many policies will offer a ‘no claims bonus’, that rewards you for not making any claims over a certain period, usually a year. This will increase the longer you go without claiming.
How much will you get if you make a claim?
It is important to remember that if items you have insured are lost or damaged, you may not receive the exact amount of money you paid for them as part of your insurance.
Indemnity
If your contents insurance policy is labelled as indemnity, the insurance pay-out will take into account how much the items are worth at the time they are lost/damaged.
For example, if you bought your sofa for £500, but you’ve had it for 5 years, it will likely have a great deal of wear and tear. In this case, the insurance pay-out is likely to be significantly lower than £500 because the item has depreciated in value.
You will therefore have to replace the sofa with a cheaper model or use some of your own money.
New-for-old
However, some policies are labelled new-for-old, meaning that your pay-out will allow you to get a brand-new version of the item that you have lost.
While this may seem like a better deal, remember that a higher pay-out means you will be paying more for the insurance. Consider your finances and whether this is a worthwhile investment for you.
Contents insurance FAQs
Do I really need contents insurance?
Getting your belongings insured can give you peace of mind that if there was damage to your property that the cost of your items would be covered. Contents insurance can also be useful when you are moving house as policies can often cover items in transit during the moving process.
What is the average cost of contents insurance in the UK?
The amount your contents insurance will cost you will depend on the type of coverage you choose to go with.
For contents only cover the average cost per year is £132.
Is it cheaper to get buildings and contents insurance together?
This will depend on the provider you choose to use. Some insurers may offer discounts if you buy both policies with them. Comparing insurance on offer can help you find the best deal for you.