Home insurance: Contents insurance explained How contents insurance works

House protected by hands

Contents cover will protect against accidents as well as theft

Contents insurance covers damage to the possessions in your home, as opposed to the home itself which comes under buildings insurance. 

Here, we explore what you can expect to be covered by a typical contents insurance policy and what cover you may have to pay extra to receive. 

What contents insurance covers

Contents insurance typically covers damage which occurs due to fire, lightning, explosion or earthquake, theft (or attempted theft), riots or vandalism, storms or flooding, subsidence, falling trees, moving objects (such as a cars hitting your home) and escaping or leaking water or oil.

Contents insurance also usually covers:

  • your legal liability as occupier of the house, eg if a visitor has an accident and injures themselves
  • cost of accommodation and storage if you can't live in your home because of damage (e.g. fire, flooding etc)
  • some accidental damage to stereo equipment, TVs, computers, DVD players and any glass in furniture (e.g. a glass tabletop)
  • replacement keys and locks, and locksmith's fees if you lose or damage your keys
  • damage to TV and radio aerials, and satellite dishes
  • loss of food if a freezer breaks down
  • theft of cash from your home
  • contents of your outbuildings (although the amount of cover varies a lot from policy to policy and there may be lower limits for theft).

Go further: Which? Recommended home insurers - We've rated dozens of insurers rated to help you choose the best policy

Optional extras

Accidental damage

Standard contents insurance 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.

Personal possessions

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 that you know what you are paying for.

Legal expenses

This covers the cost of legal proceedings if you need to bring action or defend a claim. It typically covers the legal expenses incurred in most personal injury, consumer, property and employment disputes, as well as for any award of the other party's legal costs.

A few insurers include this cover as standard when you buy house insurance, but most charge an additional premium for it.

Downloads insurance

New technology brings with it new concerns. If someone broke into your home and stole your mobile phone, laptop and iPod, would you be covered on your insurance policy for the cost of replacing your music, films, ringtones or software you'd downloaded? Just under half the insurers we surveyed now include cover for digital downloads as standard.

Downloads cover will include music, mobile phone ringtones, television programmes, films, games, software and computer programs when stored on an MP3 player, desktop PC, laptop, mobile phone or home entertainment system. Have a look at our guide to downloads insurance for more information.

Go further: Buildings insurance explained - learn what parts of the home are covered by buildings insurance instead of contents insurance  

Exclusions

In some cases, there are limits on how much you can claim. For instance, it's difficult to claim the full cost of stolen cash or for all your frozen food if your freezer breaks down.

High-value items

There is usually a limit on the amount of cover for high-value items, such as jewellery or audio-visual equipment. If you have possessions of a particularly high value, check that they will be properly covered by any policy you're considering.

Some policies won't cover any liability arising from your business or trade if you are working from home.

Other common exclusions

  • Losses due to theft if you've let or sub-let your house, unless there are signs of forced entry.
  • Damage which occurs when the house is unoccupied for more than a certain number of days – such as pipes bursting.
  • Cost of replacing an entire set (of furniture or units, for example) if only part of the set is damaged. You’ll usually receive only the cost of replacing the damaged parts.
  • It's important to read the policy carefully to make sure it provides the cover you need and that you understand your responsibilities (such as locking doors and windows when you leave the property).

Policy choices

There are several different types of contents insurance policy you can choose. It's important to go for the right one to make sure you don't end up out of pocket if you need to claim.

New-for-old vs indemnity

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.

Sum-insured vs bedroom-rated

You can choose the level of cover you need in one of two ways. A bedroom-rated policy is based on the number of bedrooms your home has (often subject to a maximum amount of cover).

Alternatively, with a sum-insured policy, you work out how much cover you need, and the insurer calculates your premium on that basis. It's not always obvious which type offers the best value, so we suggest you get quotes for each before deciding.

Go further: Customer satisfaction tables - find out which insurers rated highly by their customers 

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