Home Contents Insurance: Is yours enough?


It’s rare to see an organisation that really walks the talk by doing what it promises. I’d like to think that every bank and insurance could follow in the Cooperative Financial Insurance Group’s footsteps. While they are naturally a good business, doing good (=’ethical’) business is naturally beneficial for their customers, their shareholders and the world.

It’s vital to have good house insurance in emergencies. Every houseowner and renter should make appropriate arrangements for their personal effects and the building. The cost of replacing your home contents and/or repairing your house can quickly add up. You will likely find out soon enought that your emergency savings just won’t be enought to cope with all the aftereffects of flood damage, or smoke damage, or worse.

How do you prepare for purchasing home insurance? Well, one of the things that few people bother to do is to do the home equivalent of an inventory check. In other words, have you added up the value of your home possessions if you had to replace them at their original price or as new?

Well, an inventory check is a simple room by room assessment of the contents, their value and a photograph of the items. It’s better to do the inventory check on a computer, and use digital photographs of the items in the document you create. This document can then be printed out as many times as you need, saved to an online or secure location, and accessed when needed.

The list can be surprisingly long and the items you end up including will surprise you, such as teatowels, socks, blank CDs for your PC, … More than likely, you will be shocked at how much you would actually have to spend to replace ALL your contents. That only goes for the replaceable items. Some items may need to be insured separately, such as jewelry, art, expensive clothes or new equipment (remember that LCD TV?)… Additionally, you will need to examine if you need additional cover for flood or earthquake risk.

Then you need to decide whether you will choose a ‘replacement cost policy’ or a ‘actual cash value’ policy. The former policy will likely be more expensive than the latter one, but the latter will include normal wear and tear or depreciation (loss of value due to age). Do consider the effects of inflation on your policy cover, and make sure that, as prices rise, your cover rises, too, to cover the extra expenses.

Did you buy insurance for home contents? What did it cost? Did you have any problems or good experiences? Share with us!

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