Insuring your home and your possessions isn’t always the easiest process. Contents insurance can be particularly complex and people often make assumptions about the process, which can turn into myths.
So we’ve done some myth busting and separated the facts from the fiction so that you know what you need to look out for when taking out contents insurance for your possessions.
MYTH 1: You have to take out insurance with your mortgage provider
THE TRUTH: You don’t have to take out contents insurance with the lender you got your mortgage from. So many people get cajoled into buying insurance via their mortgage provider and often it isn’t adequate. The lender may recommend their own insurance scheme to you, possibly with an incentive as you have already done some business with them, but you can still look around for a better deal. In fact, you don’t have to take out contents insurance at all. Unlike buildings insurance, it is not compulsory when taking out a mortgage, but it is advised.
MYTH 2: Contents insurance covers everything in your home
THE TRUTH: You should check your policy to ensure what it actually covers. Items that are often not covered include high value items, such as jewellery or art and even some high-tech electronics, so you will need to insure these items individually.
The single item limit for ‘valuables’ varies between insurers but items worth less than £1,500 do not be need to be specified in the contract. Items including laptops, tablets and bicycles usually have to be declared as they can easily be removed from the property (by yourself day-to-day or by a thief). If in doubt, ask your insurance provider.
MYTH 3: If I have an alarm or security system at my home, my insurance premium will be cheaper.
THE TRUTH: Insurers will ask if you have a burglar alarm fitted and may give you a small discount, or even reduce your premium. In some instances it may even be a necessity, for example the insurers may only cover up to £100k worth of contents without an alarm. If you want to insure £120k worth of General Contents, you may be given 30/60 days to get an approved alarm installed. Equally, other security measures may be necessary: you may be required to have a safe to store high-value items such as jewellery, if the value exceeds their specified limit.
If you don’t have the correct locks on your home, insurers may not be able to cover you. You should have a secure, five lever deadlock or a multi-point locking system on your front door as well as locks fitted on any patio doors and windows. Most insurers will expect clients to have the minimum security requirements in place to protect their home and as such will have the following clause as standard on their policies:
MINIMUM PROTECTIONS’ CLAUSE:
External doors to be fitted with a five-lever mortice deadlock (conforming to British Standard 3621)
Patio doors in addition to central locking device, key operated bolts to be mounted internally
Window locks all ground floor and other accessible opening windows to be fitted with key operated locks/bolts
MYTH 4: You cannot get contents insurance in a shared occupancy home
THE TRUTH: You can still insure your possessions if you live in a home share, however as there are multiple key holders and people coming and going, the property is viewed as being more at risk, so premiums will be higher. It may also be difficult to claim if you are robbed but there is no sign of forced entry.
In shared student accommodation, insurers usually require the individual bedroom to have a lock if you wish to insure possessions in the room, such as laptops, TVs and music speakers.
MYTH 5: I have to work out the value of every single item in my house to claim insurance.
THE TRUTH: While you don’t have to work out the exact value of everything you own, you should have a ball park figure. If you just make a rough guess, this can backfire and leave you under insured by up to 20%. You should however work out how much high value single items are worth, especially if they are over the Single Limit Article (SAL) e.g. engagement rings and jewellery, watches, antiques etc.
To work out how much cover you need, it’s handy to use an online calculator; such as Admiral’s contents insurance calculator, which walks you through each room of your house accounting for things like electricals, furniture and decorations.
MYTH 6: Contents insurance now covers digital items like music and films.
THE TRUTH: You have to check the individual providers policy, but if an item such as your computer, which stored your iTunes files was stolen, you can claim on the lost music as long as you can provide proof of purchase. However, if you lose or break your MP3 player causing you to lose your music files, you would not be covered, and presumably you could download the lost music again from a computer.
MYTH 7: If your bike is listed on contents insurance, but it is stolen when being used outside the house, you cannot claim on contents insurance.
THE TRUTH: More than 500,000 bikes are stolen every year as they are an easy pinch, especially if they are not properly secured.. You have to check the individual providers policy, but you will need to specify in your policy if you want to include bicycle cover away from home and you will probably have to pay higher for this. Excess can be anything from £100 to £500 as bikes are at high risk of being stolen, but you usually have to request separate cover for ‘personal possessions away from the home’. You should also ensure that your bike does not exceed their specified limit – if you’re a Chris Froome in the making, check that your super-bike is covered.
MYTH 8: If I live in an area that is at high risk of flooding, I won’t be able to get contents insurance.
THE TRUTH: You can still get affordable insurance if you live in a flood risk area thanks to the new Flood Re scheme set up by the government. The scheme benefits over 350,000 households who may have previously struggled to get insurance against flooding, and means that there should be far more home insurance options available with more competitive pricing on premiums.