by stevecadman

Is your home insurance provides full cover?

When you take out home contents insurance (Contents insurance is insurance that pays for damage to, or loss of, an individual’s personal possessions whilst they are located within that individual’s home. ), it’s a good idea to make sure your cover is “new for old”.

This means that, if you have to have a damaged or stolen item replaced, your insurer should pay enough for you to buy a new version.

Some policies only include “indemnity” cover, which will take wear and tear into account and therefore pay out less.

But there are a few catches to watch out for. Many policies will not provide new-for-old cover on things such as clothing, bed linen and even pedal bikes. Check your policy booklet for any exclusions.

Another issue is when insurers agree new-for-old cover on the basis that they can decide on suppliers to replace lost or broken items.

For example, if you had a laptop stolen, you would only be able to get a replacement machine – to the same value – from the insurer’s chosen supplier, rather than exactly the same model again, or its cash equivalent.

And bear in mind that new-for-old cover could be more expensive than an indemnity policy – although many companies now offer new-for-old as standard.

What does Contents Insurance Cover?
Contents Insurance covers loss or damage to your possessions whilst they are in your home howsoever caused (apart from personal malicious damage).
In this context “possessions” basically means anything that is not permanently attached to the structure of your house . So Contents Insurance would not cover your fitted kitchen units but your furniture would. Everything permanently attached to the structure of your house is covered by Home Insurance (which is also known as Buildings Insurance.)
The most frequent cause of damage is theft, accidents in the home, burst and leaking pipes. But if you can still claim if vandals, storm, fire or flooding, falling trees or explosions, damage your belongings. Even damage to contents resulting from a vehicle or aircraft crashing into your house is covered. In fact it’s hard to think of circumstances where loss or damage would not be insured – oh yes there is one – deliberate damage. You can’t deliberately damage your contents and expect to make a valid claim!
Many policies will insure you for accidental damage caused by yourself. However, the extent of the cover can vary between policies. So do check out what’s included. Ask about videos, TV’s and computers and what about damage to mirrors and glass generally? You might well have to pay an optional extra to have them insured but it could be well worthwhile. (Claims for these will probably only be valid if the items are in the home at the time they are damaged.)
Valuables like jewellery, antiques or works of art will almost certainly need to be specifically listed on your policy. This often applies to any item valued at more than £2,000. (£2,000 is only a guide – please specifically check out the limit for valuables on your policy as these limits do vary between insurers.) There will be an extra charge for insuring these listed valuables based on what they are and their value.
Also check out whether your possessions stored in your garage or garden shed are covered. And what about any garden furniture? Are they insured? You will have to specifically ask those questions.
You may also be able to extend your cover to “All Risks” which then covers any possessions (and sometimes some cash) you take with you when you leave your house. Check out your proposed policy.
Most policies will also offer to insure the contents of your freezer in the event of spoilage due to the interruption of your electricity supply. This cover will usually be an option extra. Have you tried adding up the value of the food in your freezer? You may well be surprised how much it comes to!
Look out for policies that provide cover on a “new for old ” basis. This means that no matter what condition or how old or the item was before it was damaged or went missing, the insurance company will payout sufficient to enable a brand new item, of a similar or same specification, to be purchased. This will avoid a lot of potential aggravation with your insurer. If the insurance is on a “replacement value” basis you will receive less as the payout will be reduced to take into account the age and condition of the item. As you would expect cover on a “replacement value” basis is cheaper the “new for old” but we think the extra benefit is well worthwhile.
Finally, many good policies will also include public liability insurance. This is the type of insurance you might need if someone came to your house tripped on a toy and hurt themselves in the fall. They could make a claim against you and, as you probably know, such claims can be large.

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