Everything You Need To Know About Contents Insurance


Contents Insurance Is a Necessity

Insurance is a must for both homeowners and renters who want the protection and peace of mind knowing that if anything should happen their insurance company will take care of it. What most people fail to realize though, is that typical home and renter’s insurance does not cover everything. Contents insurance, an important, but often overlooked portion of an insurance policy, will cover the loss and damage of the contents of your home by certain causes. However, contents insurance, like every kind of insurance, has its conditions and limits, and doesn’t always come with the standard policy. So, how can you tell what you have covered and what you don’t? Here is a guide that will help you answer that question and give you a better understanding of what contents insurance is and why you need it:

Contents Insurance Protects Your Possessions

If you couldn't already tell by the name, contents insurance insures your home contents. Contents, in this context, refers to personal belongings that are not attached to your home’s structure. This can include appliances, electronics, furniture, clothes, any type of collections, and certain fixtures like flooring and decor. Typical contents insurance plans cover the repair or replacement of these items due to fire, lightning, earthquake, water damage, theft, vandalism and other, specified causes. The exact coverage of your contents insurance will differ depending on your insurance plan, so it’s important to look over your policy carefully to see which items are protected and by what types of causes.

Contents Insurance Covers Buyers… Mostly

Luckily for homeowners, contents insurance is usually included up to a certain amount on a home insurance policy. However, some of your more expensive valuables, like heirloom jewelry and fine art, will not be covered in the event of a disaster, and would require additional home contents insurance. Some insurance companies may also offer additional coverage for accidental damage, which will cover items lost or damaged accidentally. An alternative option to cover these valuables is umbrella insurance, where items and situations not usually covered under your home insurance plan are covered. This provides an added layer of protection in the event of a disaster and can save you a lot of money when a problem arises. SEE ALSO: Home Insurance Advice: Why You Need Umbrella Insurance

Contents Insurance Doesn't Come Standard For Renters

Unfortunately, renters need to be wearier because renter’s insurance often offers little to no contents insurance. Renters are only required to get insurance to cover damages to the structures of the property they are renting. This means that if the property burns down, the insurance company would cover the restoration or rebuilding of the structure. Any possessions you lose in the disaster would most likely not be covered at all. The good news is, like homeowners, renters can buy additional insurance to fill the holes in their insurance plans. These contents insurance plans are often separate from the renter’s insurance plans because the property owners usually have a pre-chosen plan for renters.

Contents Insurance Coverage Should Depend On What You Own

If you are interested in purchasing additional contents insurance, make sure to shop around for the right plan and best rate first. In order to know which plan is right for you and how much coverage you need, it is important to know how much the items in your home cost to replace. To find this out, go around your home and catalog the items that are worth the most.  Try to include an accurate price estimate from either a retailer or appraiser. If you take these estimates to an insurer, he or she can help you find the correct contents insurance plan for your needs and budget. Another thing to keep in mind is whether to get actual cash value or replacement cost coverage. Actual cash value translates to the amount that the item cost to replace at the time of the disaster, taking into account the depreciation value. Replacement cost coverage, on the other hand, covers the cost of replacing your item with the full cash value of what it, or a similar item, costs new.  Although replacement cost coverage comes with a higher premium, it may be worth it for more expensive items. SEE ALSO: What Is Covered By Basic Home Insurance  Now that you know more about contents insurance, look over your home or renter’s insurance carefully to find out exactly what you have covered and for how much. Then you can decide whether you need any additional coverage. There are many options to choose from when it comes to content’s insurance, so make sure you shop around and compare quotes and offers for a plan that suits you best.
Date of original publication:
Updated on: November 10, 2015

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