Guide to contents insurance

What is contents insurance?

Contents insurance, as the name suggests, covers the contents of your home. In general terms the things that you could take with you if you moved house e.g. clothes, TV, Fridges and furniture such as Carpets, Beds and Sofas etc.

What about the things that I take outside of the house like my clothes and jewelry?

Most policies allow you the option of insuring your personal belongings. Many policies have a general limit of unspecified items. E.g. Personal belongings limit of £1500. This means that as long as what you take out at any one time is less than £1500 you are covered. If you have expensive items such as cameras you may be asked for the details to cover them. This is know as 'specified items', you should check when taking out personal belongings cover that it meets your needs. There is nothing worse than having that brand new £2000 camera or watch stolen to find that it was not insured.

What is the legal expenses cover insurance companies try to sell me?

Legal Expenses is a bit of a goldmine product for many insurance providers and is very profitable. Its costs vary from £5 per year up to about £40. It simply give you access to legal help if you need to take someone to court. Very few people use these products mainly for two reasons:

• It is rare for people issue court proceedings and if you are in that position most will prefer face to face consultation with a solicitor
• Most people can't remember if they have it or not and never think to use it.

Our advice is to buy it if you want it but not be talked into buying it.

How are premiums worked out?

There are two types of polices for contents insurance and the way premiums are calculated are very different:

Blanket cover policies - These offer you a maximum sum insured level which can vary from £35,000 up to unlimited. Insurance companies will base your premium on the number of bedrooms you have as they will have an idea as to how much a three bedroom house will have in contents. You should be aware that if you have a 'blanket policy' that covers contents up to £100,000 for example and you only have £15,000 worth of contents that you will not get £100,000. However, if you live in a one bedroom flat and do have high value of contents they can work out very cost effective for you. For most people the benefit of these polices are that you do not need to go around the house and value all your possessions.

Sum Insured policies - these, as the name suggests, insurer your belongings to a certain value. Depending on the value of your contents these can work out to be a cheaper option. However, be warned that you are vulnerable if you are underinsured