Introduction to
Contents Insurance UK - home contents insurance usually covers your personal
belongings at the insured address and can be extended to cover items taken
away from the home such as valuables, pedal cycles and portable electrical
items such as camcorders etc. Contents Insurance uk policies are available
from a variety of sources and mostly offer similar perils, which can be seen
in our “What is covered section”. To enable an insurer to calculate a
premium for you, you must either;
Bedroom Rated
Contracts - If you accept a policy on a bedroom rated basis, the insurer
will calculate a sum insured for you based on the number of bedrooms in your
home. However, you must be very careful to make sure that the sum insured
offered under the insurance policy is adequate for your needs. If you sum
insured is not adequate and you have a claim, the insurers may apply an
average clause to your policy. This type of contract is usually better suited
to persons with lower insurance sums insured.
Sum Insured Basis - The bulk of Home Contents Insurance policies are
now written on a “New for Old basis”. This basically means that the insurers
will settle any claims by replacing the damaged item with a new item without
making any deductions for wear and tear. There are some notable exceptions
such as clothing. To qualify for this cover, you must make sure that your sum
insured is not less than the full reinstatement value of your entire contents.
It may seem a little laborious but the only way that you can check if you have
calculated your sums insured properly is to literally go around from room to
room valuing every item of contents. Remember, you must value every item that
you own as if it were brand new. When applying for contents insurance
make sure that you disclose all of the material facts to the insurers. Pay
particular attention to the questions relating to Home Security, you may find
that for Theft Insurance cover to be operative, you have to Always
check as to the type of locks fitted to your home before answering this
question, in the event of a claim for Theft, if you do not have the required
level of security, you claim may not be paid.
Type of Covers available - Please refer to our section for the list of
standard perils covered under a Home Insurance policy. It is worth considering
taking the wider accidental damage option if you have a lot of valuable
breakable items. Also consider items of value that are often taken away from
the home such as watches & jewellery, it is worth considering All Risks
Insurance for these items. Home Insurance contracts however wide,
will not cover all eventualities, even an All Risk policy will not over items
which have simply worth out through old age etc. We hope the
following matrix will prove of use to you when valuing your Contents for
Insurance purposes. We suggest that when new items are purchased, you keep a
file with purchase receipts, etc, this can greatly assist when making a claim
(contents insurance list example here >
contents insurance uk)
The Effect of Under
Insurance - it is worth remembering that you must insure for the full value of
your Contents. You cannot just pick a sum insured because you believe that is
the maximum amount you may loose. If you underinsure and make a
claim, the insurer may check your sum insured and if they believe that it is
not adequate they will apply an average clause to your claim settlement. This
can have quite an effect on the settlement of any partial insurance claim.
The following is the typical calculation for average for a partial loss
claim:-
Amount of claim divided by the correct sum insured multiplied by the actual
sum insured.
Suppose that you
have insured your Contents for £20,000 and after a claim, the insurers say
your true sum insured should have been £40,000. If you submit a claim
for £2000 the effect of the average clause will be to reduce your claim to
£1000. It is false economy to underinsure, you will not receive the
correct cover required and of course you may even be in breech of your lenders
mortgage conditions.
