Home and Contents Insurance
Sometimes it’s hard to know where to draw the line on insurance coverage. What’s really critical, and what’s nice, but not totally necessary? Of course, the answer to that question will vary from person to person.
If you bought insurance to protect yourself against most all risk eventualities, you’d quickly find your budget being consumed by insurance premiums alone. The insurance industry and its marketing departments work diligently to create fears that lead you to buy their products.
So, how do you know where to draw the line? One way is to tally up the major insurable risks that could wipe you out and cover those first.
What are some of those risks? The largest one, many would agree, is major medical bills. You just can’t afford to be without insurance to cover at the very least, the major risks, such as major heart surgery, cancer, and the like. A three-week hospital stay for any sort of major health condition can quickly run into hundreds of thousands of dollars.
Another important asset people seek to protect is their home. Let’s face it, your home probably represents one of the largest assets you’ll ever own. You must protect it against things like fire, storm damages, and the like.
In fact, if you have a mortgage with a bank, they will typically require you carry insurance, at least in the amount of the mortgage.
But, even if they didn’t require it, you’d want insurance adequate to replace your home and its contents. Imagine if your $450,000 house burned to the ground tomorrow and you had no insurance. Unless your assets were substantial, replacing your home out of available savings would be difficult.
But, it’s not your home alone that should concern you. You also need to think about its contents. In reality, you need to look for both home and contents insurance.
In some states, you can buy these policies separately. Although you will want to price coverage both ways, many insurance companies price their policies in a way that it’s to your advantage to buy both of them as a single policy.
Although you may buy the two as a package, two separate trains of thinking come into play. It’s easy enough to get a professional appraisal on your home to determine its worth. You would then just purchase a policy that would cover that amount, factoring in any appreciation for materials and/or labor necessary to replace it.
With your contents, it’s not quite as straightforward. Drive through many American suburbs, and you will notice a sameness to the houses. It’s a simple task to determine replacement costs because of the standard nature of these houses.
Contents, on the other hand, vary greatly from household to household. While the Jones house may be strikingly similar to yours, they may have a $25,000 Steinway piano, a $45,000 coin collection, and an assortment of heirloom rugs worth another $25,000.
As a result, their contents coverage needs take on a radically different complexion than yours. For this reason, many insurance companies will require a detailed inventory of any goods aside from the standard furniture, appliances, and clothing that all families have. Such goods include jewelry, art, valuable collections, and high-end electronics gear.
In conclusion, when thinking about home and contents insurance, you need to be sure your coverage gives you the kind of protection so that a worst-case catastrophe would not cause you financial ruin.
Home And Content Insurance
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Home and Contents Insurance
Insuring the buildings
Although policies vary from one insurer to another, most building policies cover the main dwelling, its garage and other outbuildings, walls, gates, fences, drives, verandas, patios, swimming pools and landlord’s fittings and fixtures. One of the most important items of insurance we can obtain for you is reinstatement and replacement cover. This is for all the above structural items. You should be sure that the insurance covers the full cost of rebuilding because it might be much higher than the market value. While standard building insurance policies cover a wide range of risks, you should also think about if you need to increase your premium and obtain an accidental damage policy which covers virtually all types of accidental or malicious damage to structures.
Contents Insurance
Everyone with a home needs to insure its contents, whether the property is owned or rented. Even for a small flat, the cost of replacing furniture, carpets and personal possessions can be substantial. The cost of contents insurance is trivial by comparison. However, contents insurance policies vary greatly and it is here where we can offer valuable advice. For example, a householder can choose “new for old” cover or straight indemnity, which only covers the depreciated value of the contents. Some policies include, or can be extended to include, accidental damage. Others have optional extensions for television sets, stereos, computers, freezers, bicycles and many other such items. “Multi risks” cover is available for your personal possessions but usually this class imposes an upper limit on the value of any unspecified items.