Whether you are renting or you own your home, having contents insurance to protect your belongings from loss or damage from theft, fire or flood is a smart move.
Contents insurance covers the cost of repairing or replacing personal items including things like your clothing, jewellery, computer equipment, furniture, white goods, artworks, TV and sporting equipment. BUT don’t just assume that everything in your home will be covered under a standard contents insurance plan, if you own specialist equipment, antiques or designer furniture you may need to pay for additional cover.
That’s why when choosing between contents insurance deals, it is important to carefully review the items covered and any limits that apply to the standard cover to ensure you will be protected if and when the time comes you need to make a claim.
How do I work out how much to insure my contents for?
When it comes to insuring your personal belongings, you will need to think about how much it will cost you to replace your items if they are damaged or stolen. Remember that some things may have gone up in price - for example, buying a new laptop might cost you more in five years than it would today. This is why you need to work out the new replacement value of all items and insure to this amount, not the amount you initially paid for the item.
The best way to work out the new for old replacement value is to walk around your home and list out each item and then do some comparison shopping to see how much it would cost you today to replace this item with something similar. It is a good idea to record the serial numbers of your devices and appliances as this can help you to find a similar model or replacement if you need to.
Once you’ve drafted up your contents list, be sure to email a copy to yourself so that you have a digital version of it, just in case.
Is there a cap on contents cover?
Most contents insurance policies will have special limits that apply to items like jewellery, artwork, computer equipment, work tools, rugs. This means that in the event of any claim, the maximum you will be able to claim for these items will be capped.
You will usually have the option of purchasing additional cover for these items, which can definitely be worth it if they're value is much higher than the default limit, but it will mean that you’ll pay a higher premium.
Be sure to read the insurance PDS to make sure that you understand the limits for your policy.
Will my contents be covered away from the home?
Some policies will allow for your contents to be away from the insured premise and still be covered under your policy if they are lost or damaged. This can be really handy, but there will be limits to this type of coverage so it is important that you read the PDS carefully. You might have the option of paying for additional cover to insure your jewellery, phone or laptop while away from home especially, since these are things you often carry with you.
Do I have to pay contents insurance upfront or can I pay by the month?
You’ll have the option of paying your annual insurance cost upfront as a lump sum and some providers also offer the option of paying by the month. Generally you’ll pay less for your insurance if you pay upfront, but paying by the month can help you fit the cost of cover into your budget.
How can I save money on my contents cover?
Don’t assume that the most expensive policy will give you the most comprehensive level of cover. The goal when searching for content insurance should be for you to find the cheapest price for the content cover you need. Here are some ways that you can reduce your contents insurance costs:
- Shop around. Don’t fall into the trap of auto renewing your policy. Insurance providers have deals or incentives all the time and you can save yourself lots of money with a bit of comparison shopping.
- Secure your property. The more secure your property is the lower your premium is likely to be. Taking measures like installing locks on doors and windows, putting in a security alarm or camera and installing smoke alarms is a great way to snag yourself a lower premium.
- Multiple policy discount. If you have more than one product with any one insurer you could be eligible for a multi-policy discount. Even if you don't currently qualify for this discount, talk to your insurer about what deals they can offer to tempt you to switch other insurance policies over to them.
- Flexible excess. You can reduce your insurance premium by opting for a higher excess amount. This means that in the event of a claim you will need to pay a higher upfront payment but your monthly insurance premiums will be cheaper.