Owning a home is one of the biggest investments you can ever make. The real estate industry has been expanding and homes are no longer cheap. You might need years of investment to buy or build the home of your dreams.

While owning a home is one thing, getting a good insurance policy for the home is another. You need a good insurance policy to protect your home and belongings. But what kind of insurance should you get?

Well, you need to insure the contents of your home, not just the house. This is important to make sure that you are protected from damages to the contents of your home. Here’s how it works.

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Home Insurance

Home insurance is supposed to not only protect your home but also your belongings. However, there are different types of insurance policies. They include;

  • Content Insurance: This insurance policy covers the contents of your home. These are the items you would carry if you are moving to another house. It also includes curtains, carpets, and fittings.
  • Building Insurance: This insurance policy, on the other hand, covers the building, or rather your house. This includes the permanent house structure inside and outside the house. Home repair costs are covered in this policy.

As a homeowner, you need to understand that home and contents insurance are different. While you might be required to get home insurance for your home, content insurance might be optional. It is, however, essential to insure the contents of your home as well.

How Contents Insurance Works

Contents insurance can be classified into two, namely new for old and indemnity contents insurance. New for old contents insurance is a policy that does not look at the wear and tear when paying for claims.

For instance, if you have a five-year-old table in your house, the payout you get from new for old contents insurance is enough to get you a new table. Indemnity insurance does not work like this.

The payout from indemnity insurance is enough for you to get a similar table. You will get money that can get you a five-year-old table. Due to this, indemnity contents insurance is relatively cheaper compared to new for old contents insurance.

What Is Covered Under Contents Insurance?

Just like the name suggests, contents insurance covers the contents of your home. For instance, if you find yourself in a situation where your home and contents are damaged by floods or a fire, you might have to part with a lot of money to replace all your possessions.

However, with contents insurance, you do not have to worry about replacing these items. Depending on the type of insurance you have, you will get a payout to replace your possessions. However, what does contents insurance cover?

Some of the most common things covered under contents insurance include furniture such as chairs and tables, floor coverings such as rugs and carpets, electronics, soft furnishings, valuables, appliances, clothes, shoes, linen, garden equipment, and sports equipment.

However, contents insurance does not cover things such as electrical or mechanical damage on items that have reached the end of their lives, your home’s structure, and contents whose value exceeds the coverage that you have.

Is Contents Insurance Mandatory?

Contents insurance is not mandatory. If you look at a bigger percentage of mortgage lenders, you will find that they require homeowners to get building insurance. However, contents insurance is optional.

This does not mean that you should not consider contents insurance. Imagine having spent time and money making your home stylish and functional and then you lose all the contents that you bought! How much money would you spend to replace everything or an expensive possession in your house?

Most people do not like spending money on insurance. This is one of the reasons why optional insurance covers are the least popular. However, think about how expensive it would be for you to replace your households all at once. This makes contents insurance worth paying for.

Is Contents Insurance Expensive?

The cost of your contents insurance is dictated by a couple of factors. These might include the value of your possessions, your neighborhood, and proximity to areas common with natural calamities such as earthquakes.

You can compare a range of home and contents insurance policies with iSelect, an online application that offers you a calculator to see what different insurance providers have. This way, you can choose one that meets your requirements.


The truth is that contents insurance is important. You will have peace of mind knowing that your house contents are protected whenever something happens.

Published in: Home advice | Author: Yanita


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