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What does contents insurance cover?

What does contents insurance cover?

Category: Insurance
Author: Tim Leonard
Updated: 14/06/2018

If you have a mortgage, your lender will insist you have buildings insurance in place. While contents insurance on the other hand is not compulsory, it's wise to have it anyway. Contents insurance covers any item that is not part of your home, such as goods, furniture and other valuables. Some contents insurance policies even cover the contents of your fridge and freezer, while others may cover items outside your home for an additional charge.

Contents insurance policies don't just cover the everyday items in your home. Imagine if you had a fire or your home was flooded - you could end up having to refit a new kitchen, washing machine or boiler and be hit with a bill for thousands of pounds. This kind of insurance will ensure you're covered for those kinds of bills.

What does contents insurance cover?

  • The cost of your possessions
  • Carpets, furniture, electronics
  • Goods in your outbuildings (some policies)

It protects your possessions from:

  • Fire damage
  • Floods and storms
  • Natural disasters
  • Vandalism or malicious damage
  • Theft

It may also cover:

  • Theft outside of your property, while you are abroad for example
  • Garden furniture or equipment
  • Accidental damage

It does not cover:

  • Self-inflicted damage – e.g. DIY gone wrong
  • Lost or stolen items a certain distance away from your property

Features available

  • New for old contents insurance replaces items with today's equivalent price. It may cost more but it could be worth it for furniture and electrical goods.
  • Indemnity cover takes into account the wear and tear of the item, so the cost of replacing it is taken into consideration.
  • All risks covers all items taken outside the home, such as jewellery, wallets and mobile phones. It can be useful when you go on holiday.
  • Legal cover will cover you should you need to compensate someone for injury, or are involved in a dispute with your neighbour.
  • Freezer contents cover will pay out should food in your fridge and freezer become inedible.
  • Sports equipment cover will insure things like golf clubs, tennis rackets and other sports equipment.
  • Garden equipment cover will insure lawn mowers, hedge trimmers and power tools.

Other things to bear in mind

  • Flats and apartments - If you live in a flat or an apartment, your contents insurance policy will differ from the standard type, as it needs to take other aspects into consideration, such as theft from a tenant or previous tenants with keys. It's important that you check the 'shared entrance' clause.
  • Landlords - As a landlord it's advised to take out buildings insurance, as it's often considered the tenant's responsibility to insure their own possessions. However, you may wish to insure more expensive furnishings such as sofas, beds, curtains and carpets that may not seem important to your tenant. It's always advisable to have a minimum level of contents cover in case of flood or fire. Specialist landlord contents insurance policies will usually cover the basics, as well as the following:
    • Emergency assistance covers the cost of a call out by a contractor to carry out some emergency work.
    • Legal cover pays out should you need assistance with tenants who damage your property, refuse to pay rent or refuse to leave your property.
    • Rent guarantee pays you the rent even if your tenant refuses to do so.
  • Valuables - Some contents insurance policies will only insure up to a certain value for each item. For more expensive items, such as jewellery or antiques, you may need to insure with additional cover, or take out a separate policy. Make a checklist of all your valuables and take photos of each item.
  • Accidental damage - Imagine if you were to spill paint on your brand new carpet, or your children knock over an expensive vase. Adding accidental damage to your policy covers you for items that may be dropped, broken or damaged unintentionally. Although it costs extra, seeing as we are far more likely to damage or destroy an expensive item by accident, accidental damage cover is a wise idea.
  • Excess - With any insurance policy, it's important to read the small print to see what you are and aren't covered for. You don't want to have an even nastier shock if you find out your stolen laptop actually wasn't covered.

Contents insurance exclusions

Common contents insurance exclusions may have limits on the amount you can claim for. Beware that some policies will not pay out if:

  • You lose or have an item stolen a certain distance away from your property
  • There is wilful damage
  • Damage was caused by bad DIY
  • Damage is done to expensive art or antiques – usually such expensive items will be excluded unless they're covered as an additional extra. However, this type of cover may be offered as standard by another provider, so it's worth shopping around.
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Disclaimer: This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.