How to Insure Your Contents

How to Insure Your Contents?

Contents insurance is perhaps one of the most widely misunderstood types of insurance because many people automatically assume they have this cover when they purchase a home insurance policy.

Although you can purchase optional contents insurance cover when you purchase home insurance, you can also find standalone policies that simply cover the contents within your home, whether you rent it or own it.

Cost will vary significantly depending on how much cover you need, but it is always in your best interest to safeguard your possessions against theft, damage and loss.

How Much Does Contents Insurance Cost?

When looking at how to insure your contents, the first question many people ask is how much it will cost for this type of cover. Whilst it is difficult to say exactly how much contents insurance will cost, you should understand that cost is based on the amount of cover you carry as well as the excess written into your policy. In the world of insurance, cost is always directly proportionate to the amount being insured. The best way to determine cost would be to calculate how much your contents are worth collectively, and then to compare quotes based on that amount.

How to Insure Your Contents

However, there are two basic types of contents insurance cover which will also affect how much you pay. The most common type of contents insurance is indemnity which factors in wear and tear when paying on a claim.

For example, if you insure your leather sofa which was purchased four years ago for £1,200, today the value after depreciation may be £750.

A ‘new for old’ policy costs more but will cover purchasing a new sofa which is similar to the sofa you lost at today’s market value. You can see why this cover would cost more because a similar sofa might cost £1400 at today’s market value.

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Comparing Contents Insurance Companies

Since insuring your contents is vitally important, you will want to know that the company you choose is reputable and has an ethical history of settling claims. After that, you will want to look at which company offers the best deals. Some home contents insurance companies offer deals for purchasing cover online. For example, Direct Line provides as much as a 25% discount when you buy online whereas Saga only offers discounts up to 14% online. Nat West, on the other hand, offers as much as a 20% discount to their online customers.

All three are reputable insurance companies and amongst the largest home and contents insurers in the UK. So which do you chose? This takes you back to the amount of cover you need. Direct Line and Nat West cover up to £175,000 whilst Saga only covers up to £50,000. Here again, based on the amount of cover you need, prices will vary. As well, you may get a discount for having no claims. Keep these things in mind when comparing insurance companies. Weigh cost against the reputation of the company before settling on which policy to buy.

You should always ask yourself what kinds of hardships it would cause if you lost some or all of your possessions. Imagine suddenly losing everything in your home or flat due to a raging fire. Not only will you need to find a new place to live but you would literally need to refurnish your new home in order to live there. Contents insurance is more important than many of us realise so take the time to compare quotes. Whether you purchase a standalone contents insurance policy or one that is and optional part of your home insurance, you cannot afford to be without cover.

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