Top tips for getting the best home contents insurance
We know it can be hard to choose a home insurance provider, we're here to help you by asking the right questions for your circumstances.
Not all insurers and not all home contents policies are created equal, so it’s helpful to be in the know.
Worry not. This article will help you learn the top 5 things to consider when taking out or renewing your home contents policy.
Make sure you add your big ticket items
As part of taking out a home contents insurance policy, you’ll be asked to estimate the total value of the contents. You might assume that all of your belongings will be covered up to this limit, and will be replaced if damaged or stolen. What you might not know is that most insurers impose a ‘single item maximum’ on their contents policies. This means that you might not be able to claim for the full value of these expensive items, even if the total amount you are claiming is less than the total sum you have insured.
To take an example, imagine you have bought a shiny new £4,000 TV for the living room, at a cost of £3,500. If you have a contents policy with a single item limit of £2,000 – you couldn’t claim more than £2,000 for this item if something went wrong, even if the total claim is less than your total sum insured.
You will be able to specifically list items that you own that would be above their single item limit, however this will increase your quote. You should also check that any new items you purchase during the year are covered.
If you buy your insurance through Urban Jungle, we have a specific place on our questionnaire where you have to tell us about any ‘high value items’, so it’s hard to miss.
Beware the maximum limit on ‘valuables’
In a slight variation of the above exception, many insurers also impose a maximum limit on ‘total valuables’. This can vary quite a bit by total sum, or also be specified as a certain percentage of the total sum insured, usually about 20%.
You should also note that most items count as ‘valuables’, not just your gadgets or jewellery. If it’s valuable, include it.
Our policies have a pretty generous £15k limit for these items.
Are you under-insured?
Most people would never guess that their pay-out could be decreased by under-insuring their valuables. This is called the ‘average cause’ – it basically means that instead of paying out the full value of your claim, they pay out a partial amount – usually worked out as the ratio of your current sum insured to the insurers’ valuation of your actual contents.
For example, imagine you insure contents for £15,000 when the actual value of your contents is £30,000. A break-in results in a theft of £5,000 worth of valuables. However, for the insurer, the payout is worked out as £2,500. See the diagram below:
Unfortunately, whilst you have had £5,000 worth of your property stolen, the insurer will only pay out £2,500, less any policy excess. This is despite you taking out insurance to cover £15,000 worth of valuables.
When comparing insurers for you, we found that increasing the level of cover made very little difference in price, so we have set our default cover levels to £50k, which should be enough for most people.
Are your personal items covered away from home?
Most insurers will either provide as standard, or allow you to add on to a contents policy, cover for your personal possessions whilst they are away from your home. Typically this would cover things like wallets, jewellery, laptops, etc.
There are a few things about this type of cover to check in particular, to make sure that its suitable for your needs:
- Does it cover you for accidental damage?
- Does it cover any personally owned business related equipment?
- Does the policy apply a limit to the number of days when cover is provided within that policy year?
- Does protection apply if you take the items abroad?
- Does is cover smartphones?
If you have any questions about these for our policies, please do get in touch.