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Household contents insurance

It is a good idea to take out home contents insurance to cover your possessions against fire, theft and other risks, such as accidental damage. If something happens to destroy or damage your possessions, it can cost a lot of money to replace them items, some of which may be essential.

This page tells you what you can expect home contents insurance to cover, how to choose a policy and what problems you might have with making an insurance claim.

Top tips

If you download music and films onto your computer, mobile phone, iPod or mp3 player, many home contents policies offer download insurance as an add-on.

This insurance protects you against the cost of replacing your downloads if they're damaged, lost or stolen.

However, you won't be covered if the loss is caused by a computer virus or hardware failure so make sure you've got up-to-date anti-virus protection.

What is home contents insurance

Home contents insurance covers you against loss, theft  or damage to your personal and home possessions. It can also cover you if you take items out of the home, on holiday, for example.

The insurance covers your own possessions and those of close family members living with you. It may not cover the possessions of anyone staying with you temporarily.

You don't have to take out home contents insurance. However, it's a good idea to do so because if any of your contents are lost, stolen or damaged you will have to pay to replace them.

What should your policy cover

Your policy should cover damage caused by fire, flooding, storms and theft. You may have to pay extra to cover accidental loss or damage to your possessions. This may be worth considering is you have children or pets. However, check what's included.

You will also have to pay extra to cover possessions that you take out of the home, for example, cameras or jewellery, or to cover a particularly valuable item. Your policy may not cover the contents of a freezer or a mobile phone and there may be an upper limit for a single item.

Most policies carry an excess. This means that you won't be covered for the first few pounds of a claim. A typical excess may be between £50 and £100.

Most policies offer new for old cover. This means you get the full replacement cost of items that are lost, stolen or damaged. However, some policies will only offer you the amount that your items are currently worth if you need to make a claim. Make sure you know what your policy is offering to replace before you take it out.

Home contents insurance can also pay a lump sum if you die from a fire, theft or accident at home. It can also cover you if someone is injured or dies when visiting you.

Home contents insurance if you're renting

If you are a tenant, check to see whether you are responsible for insuring any contents belonging to your landlord because you may be liable for replacing any items that are lost or damaged. If you rent an item, for example, a television, check whether you need to insure this.

Taking out a home contents policy

Before you take out a policy you need to work out how much cover you need, based on the cost of replacing all your possessions. Many people under-insure themselves, so make sure you include everything, including carpets or flooring and the contents of your garage or shed. You may want to get several quotes before choosing a policy.

Sum-insured and bedroom rated policies

Home contents insurance policies are usually worked either on the number of rooms in your house. These are known as bedroom rated polices. Alternatively, they may be based on the total value of the contents and possessions you own. These are called sum-insured policies.

Premiums can be higher if you take out a policy worked out on the number of rooms but they may offer more cover.

You will need to compare:

  • what each policy covers and what the exclusions are
  • the premium you have to pay
  • the amount of any excess that you will have to pay yourself
  • the no claims bonus which increases yearly if you don't make a claim
  • any additional conditions, for example, about leaving your home unoccupied for a long period.

You must give your insurer as much information as you can about anything that might affect their decision to insure you, or how much to charge you. You must also tell them about any changes in your circumstances.

Problems with home contents insurance claims

  • If you are underinsured your insurer may only pay a proportion of your claim
  • There may be a limit on what you can claim for a single item and you may have to  pay an excess
  • If you didn't take out a new for old policy, you will not be covered for fair wear and tear to an item
  • Your policy may say that your insurer can provide a replacement item rather than the money to replace it  
  • If one item in a set is damaged, for example, one chair in a set, you may not be able to find a matching replacement. If this happens your insurer should pay for the damaged item and an amount towards replacing the undamaged items.

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