Contents insurance is the type of coverage necessary to protect your personal property against many types of damage as well as theft and vandalism. This type is more commonly referred to as personal property insurance in the United States, while it is known as contents insurance in other English speaking countries. Most standard homeowner's policies include coverage for the contents of the home, but the limits tend to be only a small percentage of the policy value.
What is Covered
Your home's contents include everything that belongs to you, inside the home, on the insured property, and some items are even insured if you take them away from the dwelling. It includes your furniture, paintings on the walls, rugs on the floors, fans hanging from the ceiling, and everything in between. Your clothing, appliances, and jewelry are all included in the contents of your home, but so are your lawn tools, an outdoor playset, and any exercise equipment or tools you keep elsewhere on the property.
Personal Property Limits
One thing that most people need to be careful is of is that all of your home contents are properly insured. Most standard policies only cover your property up to a few thousand dollars, while the average family has many thousands of dollars in personal property. Check the limits of your contents insurance and increase them as needed to fully protect your property.
What is Not Covered
Even covered items may be excluded from certain claims. For example, willful damage by you or an immediate family member is covered by contents insurance. Likewise, some items are excluded because they contribute a high degree of risk, such as laptop computers, iPads, and other high-value electronics. Check your policy to determine what items are excluded, and pick up a rider to fill the gaps.
The number of covered perils will differ by insurer, but include some perils across all policies. Fire, wind damage and water damage are typically included, along with earthquake damage, vandalism, and lightning damage. There will always be some perils which are not covered on any policy, and some risks, such as the risk of flooding, is not automatically included in any type of home insurance. This does not mean you do not need flood insurance, it simply means that the risks of providing flood insurance are so high that the policy must be made separately.
Making a Home Inventory
A home inventory is the best way to keep track of what property is insured. Insurance companies prefer a video home inventory; usually made using a hand-held video recorder, because it provides them with proof that you had the items, along with a visual reference for the condition of the item. To make a home inventory, move from room to room in the home, recording each and every piece of property you have. When possible, include a video copy of the receipts to provide proof of the value of the items.
Personal Property Away From Home
Most of your personal property coverage extends to times when the property is away from home, such as during transport or while you are out of town. For example, if you were transporting your TV from your house to friends and it got stolen out of your car, your contents insurance would cover the theft. The same would be true of exercise equipment, tools, or recreational items taken to the beach on a summer day.
Discounts to Reduce Premiums
You can save money on your contents insurance premiums by looking for discounts. Common discounts include those given to people who are married or who live in an area with a lower than average crime rate. Other discounts are given based on reducing risks for the insurance company, and include deadbolt locks on the doors, bars on the doors and windows, and alarm systems. The best discounts are given to homes with security systems that are monitored around the clock from a remote location.