Content insurance is an insurance to cover for your personal belongings in case they undergo some accident or mishap. It is important to insure the contents in your home so that you can have some peace of mind if you meet an unpleasant event, or go through an accident like fire flood or burglary. Content insurance can help you get over your loss either as a replacement payment or new for old.
Types of content insurance.
There are basically two types of content insurance:
- Replacement payment: in this type of insurance, the insurer will pay the value for your possession. Since the value of everything depreciates it is important that you revise your policy every year. Keep a close eye on the value of your possession so that you do not end up paying more for something that has lesser value.
- New for old: in this type of policy, the insurer, in case of any damage or loss will replace your possession with a new one. The new item will definitely have higher value than your old possession so you have to pay a high premium for it.
Estimating the right content insurance.
Mostly, people do not maintain an inventory list but, if you are looking forward to buy a content insurance it is high time you start maintaining one. Not knowing what you have in your possession or the actual cost of your purchases, may end up underestimating the value of your possessions.
It is best to update you inventory list often and have a detailed revision every year to make sure that all of your possession are covered. When updating your inventory list, make sure it is as detailed as possible. Make sure to include receipts, pictures (to know the condition of the item), serial numbers and other details to make the claiming process easy and smooth.
There are many factors taken into consideration while determining the premium amount you have to pay. The main and basic factor is the value of the items and the number of items you want to get insured. This means greater the level of coverage you want, greater the amount of premium you will have to pay. The area in which your house is situated and the way your house is being occupied and used makes also a major difference in the amount of premium you may have to pay.
Other factors include the age of the policy buyer and all other person included in the policy. The premium that is set for your content insurance also depends on the different security measures that you have already taken in your house.
It is better to have certain security and precautionary measures taken at your house beforehand. Security measures include having
- Fire extinguishers,
- Smoke detectors,
- CCTV Cameras,
- Security systems, etc.
Having these security measures can make you entitled to avail certain discounts like multi-policy discount, no-claims bonus, linked policy discount, and years of insurance discount.
However, there are some policies that necessitate adding security measures to your house before purchasing the policy.