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Learn
about insurance for your home building contents.
HOME
CONTENTS INSURANCE
In short, a
home contents insurance policy insures against
the contents of your home being damaged, lost
(in certain circumstances) or stolen.
As the name
suggests, primarily this type of insurance is
insurance against any of these unpleasant events
happening to items in your home; however,
reading a home contents insurance policy
carefully may mean that there are certain
circumstances under which you may claim against
the home contents insurance policy even when one
of these events happens outside of the home.
INSURANCE
FOR THE CONTENTS OF YOUR HOME
How does the policy work? Like all
insurance policies – to one extent or another - home contents insurance
works on the basis of the total sum insured. As such, when you are filling
in your home contents insurance policy submission form, you are asked to
provide a breakdown of all the major items in your insuring. However, you do
need to be careful because most home contents insurance policies have a
threshold amount, over which you need to individually declare (and possibly
insure) the item as a separate item, and which may not be allowed to include
in your overall home contents insurance policy.
How is the ‘value’ calculated? As we all know, 90% of the items we have in our
home are of no value to anyone but ourselves – they have real sentimental value.
However, for the purposes of your home contents insurance policy, ‘sentimental
value’ means nothing – your premiums are calculated on the cold hard cash cost
of replacing that item!
Cataloging your home In order to give both yourself and you insurance company a
better understanding of the items that are in your home and that are being
insured, it is always a good idea that you catalogue the items in your home. An
increasingly popular way for people to catalogue the valuables in their home to
go around the house with a video camera and taking video footage of each room.
What about risk factor? All insurance is based on risk – the risk of the
insurance company having to pay out – and home contents insurance is no
different is this regard. So, if you live in a neighborhood of high crime, you
should expect insurance companies to either refuse to insure you or to ask for
very hefty premiums. Alternatively, if you live in a nice quiet neighborhood
with little or no reported crime, then you should expect your premiums to be
very low indeed.
Renewing your home contents insurance It is something most people who have home
contents insurance forget, yet it is essential that you do it right: when it
comes to time to re-insure your home contents, you must remember what you bought
over the last year so that you can add this to you new policy. To do otherwise
means that these items are unlikely to be insured. Likewise, you must remember
that a gap may grow between the real value of replacing items that increase in
value and the items insurance value (a classic example, diamond rings!). On the
other hand, the cost of replacing items that deprecate in value, such a
television, may go down from what they were last year, but may go up again if
such items become considered collectors’ items or antiques!
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Policy Information
Learn
about insurance for your home building contents.
To
teach and learn money skills, personal finance, and money
management, please go to the