Home insurance: Contents insurance explained Contents insurance problem solvers

Office contents - laptop and mug

Make sure you don't inflate prices; over-insuring can dramatically push up your premiums

Buying contents insurance can often be a complex process. 

As with most insurance products, there are a lot of details that insurers will need to know in order to accurately measure the risk of covering you. 

Here, we answer some frequently asked questions which could help you shave a fair chunk off your contents insurance premium. 

What's the difference between a sum-insured and a bedroom-rated policy?

They are different ways of selecting the level of cover you need. With a sum-insured policy, you work out the value of your possessions and the insurer calculates your premium on that basis. A bedroom-rated policy does away with the need to calculate exact costs, and is instead based on the number of bedrooms your home has.

It's not always obvious which type offers the best value, so we suggest you get quotes for each before deciding.

Go further: Which? Recommended contents insurance - find out what policies we rate the highest

Should I buy contents insurance from a broker?

If you are unsure of what type of policy is best for you then it could well be worthwhile using a broker. 

Brokers will offer advice on the most suitable policy for you and help you identify all of the items that would be covered by contents insurance. This will ensure that you don't over or under estimate the value of your possessions. A broker will then be able to find the best policy for you, at a good price.

Some brokers operate locally, others are national, and some offer an internet service. To find a broker, contact the British Insurance Brokers' Association.

We have three bedrooms in our house; one is for sleeping, one is used as a games room and the third is a study. How many bedrooms shall I tell my insurers we have?

Three. Insurers will want to know how many rooms were originally designed for sleeping in, even if they're now used for a different purpose. Your insurer may also want to know whether any rooms have been converted into bedrooms.

How do I value an item that doesn't have a modern equivalent – eg old furniture or out-of-print books?

You should insure your belongings for the amount it would cost to replace them with an equivalent new item at today's prices. You need to be as accurate as possible to avoid being under- or over-insured.

If you're unsure, seek an expert valuation from an antiques dealer, bookshop or auction house. Your insurer should also be able to offer advice. You can get further information from the Association of British Insurers.

What is accidental damage cover?

Standard contents policies include some cover for accidental damage – eg to stereo equipment – but don't cover accidental damage to goods or furnishings.

For around £20-£100 extra, you can extend cover to include these items, which can be useful if you have young children. But if your household is less active, accidental damage cover might not be worth paying extra for.

What is personal possessions (all risks) cover?

Personal possessions away from home cover is another possible cover extension area. Sometimes called 'all risks' cover, upping your protection in this way guards against loss of your possessions away from home and overseas, eg a handbag, smartphone or digital camera. However, there are restrictions on what's covered, so check with the insurer so you know what you're paying for.

What's the difference between new-for-old and indemnity cover?

With new-for-old cover, the insurer either pays the full cost of repairing damaged items or pays to replace them with equivalent new items if they're stolen or destroyed. Indemnity policies, on the other hand, deduct an amount for wear, tear and depreciation from any pay-out.

Although an indemnity policy might be cheaper than new-for-old cover, we don't recommend them, because they could leave you much worse off if you have a large claim.

I live in a shared flat and, despite having my own lockable room, I haven't been able to find an insurer that will cover my possessions. What can I do?

Insurers won't normally insure shared flats because there's a greater risk of claims being made. However, some companies do specialise in this sort of cover.

An insurance broker may also be able to find a suitable policy. The alternative is for you and the other people in the property to take out one single policy which covers everyone.

Will I get charged if I pay by instalments?

Some, but not all, companies charge extra if you pay by monthly instalments rather than a single annual premium.

If I live in an area at risk of flooding, will I still be able to get insurance?

Currently, there’s an agreement between the government and insurers that insurers will continue to offer cover to existing customers living in areas at high risk of flooding so long as the government commits sufficient money towards maintaining and improving flood defences. The agreement has just been extended in advance of a new arrangement, called Flood Re, coming online in 2015.

Is there a minimum level of home security I need to get cover?

Most insurers will insist on a minimum level of security before they will take on your business, such as deadlocks on some or all external doors. These locks will usually need to be 5-lever mortise locks and have to meet a minimum standard - usually BS3621. You will probably find that your insurer expects you to have locks on all your accessible windows as well, although some insurers don't make this a requirement. So putting locks on all your basement and ground-floor windows, plus any that may be accessible by climbing a drainpipe or wall, will increase the number of companies likely to cover you.

Will I get a discount if I have extra security?

Some security features such as a burglar alarm might get you a discount from some insurers, although probably not enough to justify installing one from scratch. If you already have an alarm though, it's probably worth shopping around for the cheapest premiums. It's important to make sure the alarm is professionally installed and maintained annually - installing it yourself may mean your insurer doesn't count it when calculating your premiums. If you're thinking of getting a burglar alarm fitted, it's worth making sure it meets SSAIB or National Security Inspectorate (NSI) standards. 

Other security measures such as CCTV might give you peace of mind, but won't make any difference to your insurance premiums. It could be worth joining Neighbourhood Watch if there's an active one in your area though, as you could get as much as a 5% discount.

Useful contacts

Association of British Insurers - 020 7600 3333
British Insurance Brokers Association - 0870 950 1790
Environment Agency - 08708 506 506
Scottish Environment Protection Agency - 01786 457700
National Flood Forum - 01299 403055
Rivers Agency in Northern Ireland

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