Whether dealing with a home or office, calculating the costs of contents insurance is easy right? All you need to do is add up the projected value of your personal belongings and report that number to the insurance broker? Well no, not exactly. Contents insurance is actually much more complicated than that and it's important you understand the minor details.
Let's say that your bedroom erupts into flames and destroys the entire room. First off, you would pray that everyone is okay but after that you would begin to go over the total damage. Little did you know, the insurance broker would force you to fill out two different forms. You would fill out one for damages to permanent or built in appliances, and another for goods that could be moved. Chances are you have little to know permanent fixtures in your bedroom so it's all defined as "moveable" goods. Is that even covered in your policy? You would be surprised to see how many do not include it.
Natural disasters like fires, floods, and wind damage account for a lot of personal damage found at homes. Also theft is a primary cause for damaged or stolen goods. Make sure your policy covers all of the above. Always read the fine print, because no matter how unique of a type of situation, there is always a chance it will not be covered.
Learn about other factors that fluctuate your house contents insurance costs, such as location of property, security systems, how often it's attended, and history of previous claims. Most insurance companies allow you to tag on "add ons" which guarantee the coverage of minute details such as covering goods inside sheds and garages.
Another area many insurance companies can quickly skip over is whether your prized possessions are covered for replacement value or current market value. You want to have replacement value if you really have key household items that you hold dear to your heart. Yes the premium is much higher, but the coverage you receive in case of damages is much higher.
Most people will not have to worry about a ton of replacement value since you likely do not own a lot of jewelry or antiques. However, current market value is a good way to rip you off. Insurance agents will assess the value of the stolen or lost goods based on current value and not what it was worth back in the day.
It's a simple formula. Pay a higher premium and your goods are covered much better than if you pay a low or very cheap premium. If you really want strong protection, you must pay a lot even if the chances of destruction or theft are very low.
Contents insurance does not need to be outrageous because you and your house probably aren't made of gold. Keep in mind that an average household makes $200,000 a year and spends 3% of that total income towards insurance. Spend your money wisely towards insurance and the coverage will stay as strong as more expensive policies.
Let's say that your bedroom erupts into flames and destroys the entire room. First off, you would pray that everyone is okay but after that you would begin to go over the total damage. Little did you know, the insurance broker would force you to fill out two different forms. You would fill out one for damages to permanent or built in appliances, and another for goods that could be moved. Chances are you have little to know permanent fixtures in your bedroom so it's all defined as "moveable" goods. Is that even covered in your policy? You would be surprised to see how many do not include it.
Natural disasters like fires, floods, and wind damage account for a lot of personal damage found at homes. Also theft is a primary cause for damaged or stolen goods. Make sure your policy covers all of the above. Always read the fine print, because no matter how unique of a type of situation, there is always a chance it will not be covered.
Learn about other factors that fluctuate your house contents insurance costs, such as location of property, security systems, how often it's attended, and history of previous claims. Most insurance companies allow you to tag on "add ons" which guarantee the coverage of minute details such as covering goods inside sheds and garages.
Another area many insurance companies can quickly skip over is whether your prized possessions are covered for replacement value or current market value. You want to have replacement value if you really have key household items that you hold dear to your heart. Yes the premium is much higher, but the coverage you receive in case of damages is much higher.
Most people will not have to worry about a ton of replacement value since you likely do not own a lot of jewelry or antiques. However, current market value is a good way to rip you off. Insurance agents will assess the value of the stolen or lost goods based on current value and not what it was worth back in the day.
It's a simple formula. Pay a higher premium and your goods are covered much better than if you pay a low or very cheap premium. If you really want strong protection, you must pay a lot even if the chances of destruction or theft are very low.
Contents insurance does not need to be outrageous because you and your house probably aren't made of gold. Keep in mind that an average household makes $200,000 a year and spends 3% of that total income towards insurance. Spend your money wisely towards insurance and the coverage will stay as strong as more expensive policies.
About the Author:
Graham McKenzie is the content Syndication Manager at insurance123.co.zaSouth Africa's leading Household Insurance information portal
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