Home Insurance

House and Contents Insurance Overview: Understanding the Importance of Contents Insurance and How the Policies Work

While everybody understands the importance of getting their home insured, not everyone realizes that they need to get their contents insured as well. A typical home insurance policy will cover just the building itself, but what about the belongings? What about the contents of a storage building on your property? It’s a good idea to look at BOTH house and contents insurance policies – especially if you live in an area that either gets a lot of extreme weather or has a high rate of break-ins and burglaries.

When comparing rates for home insurance, make sure that there is coverage for your belongings. Typically, you’ll be required to choose between two types of coverage for personal property: actual cash value and replacement cost. The latter will factor in the depreciation of the item, and the former will help reimburse you for the cost by replacing the damaged item with one of similar quality and type.

Once you consider how much content property coverage is right for your needs, it’s a good idea to review any limitation(s) that may apply. Standard policies typically limit the amount of coverage for certain types of valuables, like furniture, jewelry, fur coats, etc. For instance, if you have a diamond ring that is stolen, some standard policies will only insure up to $1,000 for the theft of a single piece of jewelry. What if the diamond ring is worth a lot more?

Taking Inventory for House and Contents Insurance

It’s good to go ahead and start taking inventory of all of your belongings. Include as much detail as possible for each piece of furniture, electronic device, jewelry, appliances, designer clothes, and any other item that is of value. Document things like makes and models of appliances and serial numbers on electronics. It’s a good idea to take photographs of everything as well.

Even if you’re a tenant and your home is already protected by your landlord’s policy, you should still consider getting contents insurance. In all likelihood, your landlord doesn’t pay insurance to cover your own personal belongings. At most, the furnishings and carpet are protected.

There are certain things that house and contents insurance policies DO NOT cover, such as you leaving the property uninhabited for a long time. If you have to travel to another state or country for awhile, be sure to inform your insurer in advance. Also, your home should be secured properly. You can’t just neglect the security just because you think you have a good insurance policy. You will be required to take the necessary steps to secure it.

Every insurer has different requirements. One place to begin your search for reasonable and affordable house and contents insurance policies is Lemonade. It’s different than the traditional insurance companies and offers a unique approach in how it deals with monthly payments. It’s worthwhile to learn about Lemonade and its annual “Giveback” feature.

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