Contents insurance covers your possessions for damage and loss. It’s not compulsory, but should be considered and you may have had some while renting, but it is even more important once you own your own home – and all the furniture and appliances in it.
Different contents policies cover different things, but typically you’ll be covered against theft, vandalism, subsidence, damage caused by fire or floods and storms.
There are 2 main types of contents insurance:
- New for old: if you make a claim you’ll be covered to replace each damaged or stolen item with a new version.
- Indemnity cover: you’ll be reimbursed the current value of the items you are making a claim for, so if their value has depreciated you may not be able to replace them.
You can take out different levels of contents cover, depending on the value of your possessions. It’s important to estimate the level you need as accurately as possible or you could end up underinsured.