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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;
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Accept a policy on a Bedroom Rated basis
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Advise the insurer of your “ Sum Inured”
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.
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.
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.