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The word ‘insurance’ is often enough to make most people instantly nauseous. As a word, the mere utter of ‘insurance’ can cause distressing flashbacks to that time you were left sitting on hold while listening to a tinny version of Coldplay 10 times over and fretting about the cost of next month’s phone bill. ‘Insurance’ usually means something has gone wrong. ‘Insurance’ usually means confusion, frustration and expense.

The majority of us hate dealing with insurance, purely because we don’t really understand what it is that we’re dealing with. Often, insurance companies hit us with so much insurance jargon that we lose interest and end up just buying into whatever they’re saying. It may be a powerful sales technique, but it doesn’t exactly give insurance a positive name.

Thankfully, we’re here to help. In this article, you’ll find out everything you need to know about contents insurance. No jargon. No sales spiel. Just easy-to-read information. Gone are the days of confusion. Say hello to Contents Insurance… In a Nutshell.

Firstly… What Exactly Is Contents Insurance?

To put it simply (which is the whole point of this article), Contents Insurance is exactly what it says on the tin: it’s insurance that pays for damage or loss of an individual’s personal an household possessions. If you’re more of a visual person, it’s like wrapping things like your laptop, your TV and your games console in bubble wrap to keep them protected.

We often hear ‘contents insurance’ in the same breath as home insurance, or even buildings insurance. But these names refer to very different things. So that there’s no confusion, here’s a quick round-up:

Buildings Insurance: much like contents insurance, buildings insurance is pretty self-explanatory. It’s an insurance policy that covers the financial cost of repairing damage to the physical structure or fittings of a property in the event of damage. This includes things like the roof, floors and walls, as well as any fitted or permanent fixtures (like your kitchen).

Home Insurance: to explain home insurance in simple terms, imagine you get your contents insurance, put it in a box with your buildings insurance and then wrap it all together and put a little bow on it – that’s home insurance. Home insurance is and buildings insurance and contents insurance sold together in one neat package. It covers both the internal and external aspects of your home and comes at one all-encompassing cost.

So, Who Needs Contents Insurance?

So, now that we’re up to speed with where contents insurance fits in, let’s see who should have it and why. Contents insurance can benefit more or less anyone but the kind of cover you take out depends very much on your personal needs and circumstances.

Tenants Contents Insurance

More and more of us in the UK are renting – so much so that we’ve spawned our own generation, ‘Generation Rent’. We’re used to hearing about the downsides of renting, but it does have its positives – such as not being responsible for the upkeep of a property. As a renter, you are not responsible for the building you’re living in, so it’s not something you need to worry about insuring – this is your landlord’s responsibility.

However, you are still responsible for your stuff. And, as a nation, we sure do have a lot of belongings. Laptops, juicers, tablets, badminton kits, guitars, you name it – if you own it, it’s up to you to protect it. So check out some contents insurance policies! Home contents insurance for tenants comes in two forms – you can either take it out just for your own things or jointly with your flatmates. However, if one of them makes a claim, it won’t just affect the premium they pay but the premium that you pay too.

And then, if your flat contains things belonging to your landlord, you are liable for any damage you cause. For this reason, some landlords and agents stipulate in their tenancy agreements that you need to take out tenants liability insurance (sometimes bundled with contents cover as ‘tenants insurance’).

Student Insurance

Now to students. Students, oh, students, with your fluffy hair, youthful looks and incessant positivity. Students may have a reputation for being poor, scruffy and living on the breadline, but the reality is that you have a lot of contents often worth a shed load of money. The average student lugs a whopping £2,150 worth of stuff to university. But, despite this hefty valuation, 45% of students arrive without insurance – pretty reckless, right?

If you’re a student heading off for your first taste of adult life, you should look around at your options when it comes to contents insurance. Unfortunately, student homes are to burglars what picnics are to bees, so it’s important that you get your insurance sorted out before you head of for fresher’s week and start downing pints of beans mixed with Guinness. Luckily, we’ve put together this handy Guide to Student Insurance so that you can quickly and painlessly sort out your cover and get back to more interesting things!

Homeowners

If you’re lucky enough to own your own home, then you’ve got two things to insure: the building itself and the things you’ve got inside it. You can cover these things separately or kill two birds with one stone by taking out one all-encompassing home insurance policy. While this is a popular choice due to the fact everything is one place, there are cases where this might prove restrictive. So it’s certainly not unheard of for people to take out buildings and home contents insurance separately.

Landlords Insurance

If you’re letting out a property somewhere, the good news is you’re not responsible for any of your tenants’ things – so you don’t have to worry about insuring them. However, you are still responsible for the building itself – and would be out of pocket, and probably quite disgruntled, if it fell down. Also, unless your flat is unfurnished, it probably contains plenty of things that belong to you – which you might also want to protect.

Standard buildings and contents policies don’t cover you if you have tenants – as insurers generally regard tenants as being higher-risk than owners. For this reason, you’ll want to look at landlord insurance – basically home insurance for rented properties, often with extra cover for things like squatting and lost income from unpaid rent.

Key Questions for Your Contents Insurer

Taking out contents insurance is a fairly straightforward task, especially in today’s market comparison climate. No two people are the same, so no two insurance policies should be either. So the key is to find a policy that works for you and for your things. Here are a few questions to help you find what you need.

Does it Provide Sufficient Cover?

The average family of four estimates their household contents to be worth £25,000. However, their true value is actually closer to £55,000, meaning that many people are being left underinsured.

You might think that having £25000 of cover on £55000 worth of stuff is only a problem if you need to make a claim over £25000. Unfortunately, this is not how things tend to pan out. Many insurers operate a so-called “averages law”, limiting the amount you can claim for all claims if you are found to be under-insured. So, if you wanted to make a £550 claim to replace a sofa, you might only be able to claim back £250! And the worst thing about under-insurance is you only find out about it when you come to claim – by which time it’s too late.

To avoid being caught out, make sure you select a healthy level of cover to begin. Not only that, update your insurance as often as you get the chance. Insurance policies don’t age like wine, and become more and more out of sync with our circumstances as time wears on. Indeed, we estimate that the value of people’s possessions increases by 24% every three years. If you’re like most people, then you’re steadily acquiring new things – make sure that your insurance cover keeps pace!

Does it Protect My Valuables?

Home and contents insurance automatically covers valuables up to a certain limit. This is the Single Item Limit, in standard policies typically around £1500. You need to tell your insurer about any items valued over the limit so that you can make sure you’re covered for them.

To give you an example: you might have £50,000 of possessions and £50,000 of corresponding cover. That’s definitely a tick in the box. However, if that figure includes £5000 for an undisclosed diamond ring, this may cause problems if you ever need to claim. If your single-item limit is £1500, this may be all you can recover, leaving you £3500 short – even if you have £50000 of cover in total.

By listing your valuable items separately on your policy, you can pay a bit extra to ensure they’re fully covered.

Does it Cover How I Want to Live?

Like mobile phone contracts, insurance policies can be personalised to fit you and your lifestyle. You may want to stick with a standard, off-the-shelf policy – but you at least want to consider some of the more common policy bolt-ons.

Standard home and contents policies are designed to protect your possessions against common perils like fire, flooding and burglary. They’re not set up to thwart clumsiness, red wine or butter fingers. But they can be. By adding Accidental Damage Cover to your policy, you’re covering yourself against those pesky spills, knocks and breakages that can strike at any time.

The majority of contents insurance policies will only cover your belongings while they’re in your home – which is fine if you don’t take things out with you. But, with more and more people freelancing and flexible working on the rise, people are increasingly carrying expensive items round with them wherever they go. But you don’t have to be left red-faced and annoyed when someone on the tube puts their umbrella through your laptop screen. Add Out-of-Home Cover to your policy instead. 

Higher Excess, Lower Premium; Lower Excess, Higher Premium?

An excess or deductible, as it’s also called is the amount you have to contribute towards any claim out of your own money. If you have an excess of £200 and make a claim for £1000, you end up paying £200 and your insurer the remaining £800.

Generally speaking, the higher your excess, the lower your premium (because higher excesses mean insurers have less to pay out on claims). And vice versa. So why might you want to play around with your excess level? The balance you strike between premium and excess depends very much on your personal needs and circumstances, as well as your risk appetite …

Having a higher excess takes smaller claims off the table. If you have a £1000 excess, you could be hit with multiple £500 losses and not be able to claim back. But if you suffer a £20000 loss, you’ll still get 95% of it back (£20000 – £1000). So, if you’re betting against having lots of small claims (you may be a careful person) but still want protection against one-off catastrophes (like your house burning down), then a higher-excess policy is worth thinking about. Firstly though, be sure that you’ll have enough cash to cover the higher excess, should you need to claim.

Do I Want One Contents Policy, or Several?

It’s often convenient to register all your things under one contents insurance policy (or home insurance policy, if you own a property) – keeps everything in one place, right? However, it can sometimes be beneficial to have multiple policies.

For instance, the sort of policy you want for your home or your home contents proper – such as your white goods – might not be the best way to protect your gadgets. Much of this comes down to excess levels – which, for home insurance, can be quite high. If the excess on your home or contents policy is more than the value of your devices, then it won’t provide any effective cover.

One option is to reduce the excess on your home or your contents policy. However, lowering your excess tends to drive up your premiums – which could cost you in the long run on a high-ticket item like home insurance. Plus, any claims you make on your gadgets will also lead to higher home insurance premiums, and could jeopardise any no-claims bonus you might have. A common solution to this problem is to take out a separate policy for your gadgets. This way, you can customise your gadgets cover to best meet your needs, all the while leaving your existing home contents cover untouched.

For tips, tricks and best practice on protecting your gadgets, check out our recent post on gadget insurance.

Once you’ve chosen and activated the cover you want, you can kick back and enjoy life – this is, believe it or not, what insurance is all about. Worried about leaving your laptop on the train after a long day? Don’t, it’s insured (with out-of-home cover, of course!). Worried about your fridge exploding? Don’t, it’s insured. Worried about your collection of Ming vases? Don’t, they’re insured (and listed separately!) on your contents policy.

This doesn’t mean you’ll never have an insurance question ever again. You may have a question about your policy document, about renewal or about making a claim. To help you answer these – and to help you out with the inevitable insurance jargon – we’ve got together a handy Insurance Jargon Buster.

Insurance can be hard to get your head around and sometimes it can all seem like a load of baloney thrown at you by a sleazy salesman who’s doing nothing more than trying to get you to part ways with your hard-earned cash. But, with a bit of research and some welcome de-jargoning, insurance doesn’t have to be scary, it can actually be pretty simple. It’s important you get it right though – so make sure that you don’t just buy a policy to get it over and done with.

So there you have it, contents insurance… in a nutshell. Well, a giant nutshell.

Insuring your contents with buzzvault

We recognised that insurance doesn’t always work as it should, which is why we built buzzvault: hyper-personalised home and contents insurance based on a digital inventory of what you own and its value. So what does this mean for you, the customer?

  1. Our insurance is based on an up-to-date record of what you own and its value, so you always have the right level of cover in place.
  2. You can add new items to your policy as and when you acquire them, so your cover stays up to date.
  3. If an item is listed in your buzzvault, then it’s covered. End of story. Simply open our app and claim back at the touch of a button.

If you want to learn more about what we offer, then head over to https://gobuzzvault.com. Or jump straight in and get a super-rapid personalised quote now.