Basic Guidelines on Contents Insurance

2007-03-08 10:33:40

( Insurance )



Purchasing contents insurance provides protection for the possessions in your home from fire, storms, explosions, lightning, burglary and vandalism. It is usually purchased along with house insurance, although they can also be purchased separately to ensure the best coverage is received at the most economical cost.

House contents insurance usually covers for items permanently found in your home, which can include computers, televisions, electrical appliances, video equipment, art work, clothes, food, household goods, stereo, keys and locks and furniture up to a specified limit.

Contents insurance will not cover for any items taken outside your home such as laptop computers, jewelry, or sports equipment. You can obtain other forms of insurance to cover these items. Contents insurance will also exclude coverage for a house that has been left unattended for 30 days or more. It also does not cover for any losses that are a result of any business activity done at home.

The premiums of insurance for house contents are determined by a number of factors: the value of your property and its contents, the location of your home, the type of property you own and your claims history. Premiums are also based on either the number of bedrooms in your house, or based on a sum-insured, which requires you to calculate the contents of your home by providing an itemized list.

There are two types of contents insurance: a new-for-old coverage will replace your old belongings for new ones if they are stolen or damaged, and can no longer be repaired. There are instances when insurance companies replace the actual lost or damaged items with a new one, instead of providing the cash for it.

Indemnity coverage has a cheaper premium but will only assess your belongings according to its current market value. The amount therefore that will be paid out to you could be equal to the purchase of a second hand replacement; you may have to add to the money that is paid out to you to replace what has been lost or damaged.

Contents insurance premiums can be expensive. You can obtain cheap contents insurance by following some preventive measures to protect the contents of your home. Install burglar devices and locks in your home, and plant shrubs (not tall plants) around the perimeter of your home to prevent theft. If you need to be away from your home for long periods of time, you can install a timer switch that automatically switches appliances and lights on during specific times of the day to make it seem that someone is home.


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