A Basic Guide To Home Contents Insurance

Basically, home contents insurance is insurance protection against the replacement cost that you would otherwise have to pay to replace the contents of your home in the event of then being lost, damaged or stolen.  As is the case with home buildings insurance, the main factors contributing to grounds under which you can make a claim against your home contents insurance include theft/burglary, damage due to floods, burst water pipes or boilers, etc.

There are, however, two very important factors that you need to keep in mind when insuring the contents of your home: 

• First, in the case of home contents insurance, it is rarely the case that your mortgage provider is going to insist that you have this type of insurance as part of your mortgage agreement;
• Second, regardless of whether you own or rent the property you are currently living in, you should still be looking to insure the contents of your home – as these are your personal possessions.  

Two further aspects of home contents insurance also need to be considered carefully when you are checking out the different kinds of policies on offer.  In some, but not all, cases you can be insured for your home contents even when the items listed in your home contents insurance policy are not actually physically located on the home ‘property’.  So, for example,

• First, it is possible to claim when you are transporting items from one place to another and they are stolen.  
• Second, home contents insurance is insurance against the replacement cost of the item being insured. 

It does not, nor is it intended to, insure you against the nostalgic value of the item damaged/lost.  So, for example, if you insure a picture your deceased grandmother gave you, which would cost £20 to replace, it makes little difference that it was your deceased grandmother who gave it to you and that it cannot, therefore, be replaced. 

Although home contents insurance is, in all but a few very rare circumstances, a completely voluntary scheme of insurance to subscribe to, if you are in any doubt as to the value of this insurance scheme, take a quick mental inventory of the contents on your home and their value and then get a few quotes off the internet and you’ll soon be seeing the value of having your home contents properly insured.

8 Easy Tips for Cheaper Home Insurance

No one likes paying for home insurance, but it's a necessary evil for most of us. This doesn't mean you have to pay through the nose for it though - try these 8 easy tips for cheaper home insurance and see how much you could reduce your premiums by.

• Shop Around

By comparing prices from several insurance companies, you'll probably be able to reduce your premiums by a substantial amount. This may seem obvious, but research has shown that a surprisingly large proportion of people either just renew their current policy, or get only one or two quotes. Many insurance web sites will automatically compare dozens of policies for you, making this one of the easiest ways to reduce your insurance bill.

• Buy online

If you buy your policy online you can often get a discount of up to 20% on normal prices, because there are less administration costs involved and the savings can be passed on to you.

• Combine your buildings and contents policies

Many insurers will give you a discount if you take out both types of home insurance with them, and this usually works out cheaper than getting the two kinds of policies from different companies.

• Pay upfront

Although most insurers let you pay your premium in monthly instalments, many will charge interest for this. If you can afford to pay a full year's premium in advance, then this will work out cheaper in the long run.

• Don't claim for small amounts

Making many small claims can increase your insurance costs, as your insurer may see you as a greater risk and increase your premiums. You will also lose any no claims discount your policy has. Of course, you're entitled to claim for anything your policy covers, but ask yourself if making a small claim is really worth the hassle and possible future costs.

• Voluntary excess

This is related to the last point. Insurance policies feature something known as 'excess', which basically means that the policy won't pay out on claims below a certain value. On some policies, if you choose to raise your excess to a higher level, then your premiums will be lower.

• Increase your home security

Beefing up your home security with better door locks, window locks, outdoor lighting, and alarm systems can all result in lower premiums. Ask your insurer what you could do to get extra discounts.

• Reduce your cover

Many policies feature benefits that you might not need, such as cover for personal possessions while travelling, or 'free' legal advice. Look through your policy and see what parts of it you really need - by cutting your cover down to size you may be able to reduce your premium.

6 Common Property Insurance Mistakes

Getting the right property and casualty insurance coverage may not rank high on your list of financial priorities.Compared with investment decisions and estate planning issues, questions about the language in your homeowners policy, say, may seem hardly worth considering. Yet the more successful you become, the more complicated your asset-protection needs are likely to be and the more you have to lose. Suppose, for example, that in addition to your primary residence a historic home you also own a house at the beach and a condo in the city. The properties are in three different states. The value of your collection of Abstract Expressionist paintings has grown rapidly. And you just volunteered to serve on the board of directors of a charitable organization.

Almost every aspect of this situation could cost you dearly. Insurance laws may vary widely from state to state, different kinds of property require specialized coverage, and collections of art, antique cars, and other unique items may be difficult to protect fully. Meanwhile, serving on a nonprofit's board could subject you to additional personal liability.

Safeguarding yourself and your family may mean buying additional coverage, but more insurance isn’t necessarily the solution. Rather, it’s important to review all of your needs, consider specialized policies or policy options, and coordinate your coverage with other aspects of your financial situation. Here are 6 different shortcomings that could prove costly.

1. Leaving gaps in homeowners coverage. Any homeowner needs to review coverage regularly to keep up with rising replacement costs. But insuring different kinds of homes in different locales poses extra challenges. If you buy insurance from more than one carrier, you may face contrasting rules, limitations, and policy renewal dates. For example, the liability limit on the policy for a second home might fall below the minimum on an excess liability policy designed to complement the insurance on your primary home. You could wind up responsible for the difference.
2. Ignoring properties unique characteristics. One perk of affluence is the means to own exceptional homes; one drawback is that they may be difficult to insure adequately. Standard homeowners coverage won’t pay for the materials and craftsmanship needed to rebuild that 19th century showplace you’ve painstakingly restored. Coastal homes may face hurricane damage, while a place in the California mountains could be subject to earthquakes or wildfires. Meanwhile, city co-ops or condos may need policies tailored to their buildings or associations coverage.
3. Under insuring art and collectibles. Standard homeowners policies limit coverage for the losses of antiques, furs, and other valuables. And while you could schedule additional coverage, insuring the real value of a collection of contemporary art or vintage muscle cars likely will require a specialized policy addressing several critical issues. How is the value of the collection determined? (You’ll need a professional appraisal when the policy is designed, with frequent updates as items appreciate.) Will a damaged or destroyed item be paid for with cash, or will you be required to have it replaced or restored? Will additions to your collection automatically be covered?
4. Forgetting to insure household employees. When someone works for you or your family, as a nanny, landscaper, personal assistant, or in another role, you could be liable for medical expenses and lost wages if the worker is hurt on the job. Several states require household employers to pay into a workers compensation fund, while in other states it’s optional, but providing such insurance may be mandatory for ensuring your financial well being. If an employee drives your car, also make sure he or she is included on your policy.
5. Neglecting your liability as a board member. Excess liability coverage could help protect you if you’re sued as a director of a nonprofit's board. Or for more comprehensive protection, you may want to consider special directors and officers liability insurance.
6. Failing to get frequent policy reviews and updates. Your financial life isn’t static, and neither are your insurance needs. The value of a collection may increase; extensive home renovations could mean a sharp rise in the value of your property; and the re titling of assets as part of your estate plan - or because of divorce, a death in the family, or the birth of a child - could necessitate policy changes. Even lacking major events, you probably need a comprehensive review of all your insurance coverage at least every two years.

Homeowner Insurance Policy

The homeowner insurance policy is divided into sections. Each section has benefits and features. The home policy is divided into two main parts. When you see the declarations page on a home policy then you will see its structure very clearly.

Section I – provides property coverage for the dwelling, other structures, personal property and additional living expense.

A. The Dwelling – provides coverage to the dwelling and the structures attached to the dwelling.

B. Other Structures – Provides coverage for other structures other than the dwelling that set a part from the dwelling.

C. Personal Property – provides personal property coverage for the insured anywhere in the world.

D. Additional Living Expense – provides additional living expenses to the insured if their dwelling becomes uninhabitable.

Section II – provides liability insurance and medical payments to third parties.

A. Personal Liability- provides coverage in the event a claim or law suit is brought against the insured for damages because of bodily injury or property damage.

B. Medical Payments – provides medical payments to others in the event the individual is injured and requires medical treatment.

There are many more additional benefits and endorsements to these two sections. The home policy will list the perils that are covered under the policy. The homeowner policy has a wide range of protection. Homeowner insurance policies are sold on either a replacement cost or actual cash value basis. The replacement cost homeowner policy is more appropriate for newer homes built within the last 40 years. The actual cash value policy is better for older homes that have depreciated in market value.

There are discounts available for things like smoke detectors, dead bolt locks, and fire extinguishers. Burglar alarms and fire alarms that transmit to the police station and fire departments will qualify for even larger discounts. There are retirement discounts for the senior citizen as well as multi-policy discounts when you purchase auto and home insurance from the same company.

Home Insurance

It seems like accidents, disasters, and catastrophes only strike when you're uninsured. Even if your policy only lapses one day, that will be the day that the neighbor's tree falls into your house. Not having home insurance these days is a bad idea, for every year on the news we hear about some new tragic event that has occurred because Nature had her way. Even a simple summer thunderstorm can cause wreckage and property damage. And you know that it's better to be prepared, even if insurance seems never to pay off. 

Though the entire idea of paying money to a company every single month "just in case" something happens seems a little ridiculous, these days you can't get by without insurance. Even the incredibly lucky will have unlucky days. The last thing you want is to be the one throwing your hands up and lamenting the next time there's a flood, tornado, or earthquake. Repair costs to damaged property and destroyed valuables often ends up being much more costly in the end.

So, you know that you have to have insurance on your home.  But that doesn't mean that you can afford to pay costly rates to protect your property.  After all, everyone has to live within a certain budget, and usually there isn't room for much extra.  So how can you safely insure all your property and still afford to live on your property?

It's always a great idea to shop around and find the cheapest quotes, but who honestly has the time to stay on the phone all day?  There are ways to find the best deal on your home insurance without wasting a lot of your own valuable time.  First, know how to cross-deal and, if possible, lump your insurance together.

If you already own a car, boat, or have any type of insurance on anything (even life insurance on yourself), you may be able to get a better deal all the way around.  Call your insurance provider or insurance agent and tell them you'd like to talk about home insurance, you already have existing insurance, and can they be linked together?  You'd be surprised how many companies offer deals this way, and in some cases your existing insurance becomes much cheaper.  Even if you are only renting, you'll find that renter's insurance is affordable and can lower your car insurance costs.  For those who already have insurance policies, or need multiple insurance, the best thing to do is to get all the insurance you need from one agent or company.  Not only is this often much cheaper than buying several different policies, it saves you a lot of aggravation and extra bills.  It's much easier to write a single check for all your insurance every month than five different checks to five different companies.

Another way to find the best quotes on home insurance is to use the Internet.  Through any search engine, you'll be able to find sites where you can compare the quotes of several different companies at the same time.  Often by filling out a single online form, shoppers will be able to compare many policies at once.  Calling around on the phone to essentially do the same thing could take hours, but with the Internet getting quotes is as simple as clicking a button.  Many sites offer these quotes for free, so you shouldn't pay anything just to get home insurance quotes.

Home insurance is something that all homeowners should have.  Rental insurance can protect renters, and is often purchased at very affordable prices.  Insurance doesn't have to be expensive, and getting the best rates doesn't have to be a hassle.  By finding the best deals, and getting the best price, you'll have money in your pocket and your home will still be secure.