What is contents insurance?

If you’re doing some digging into your home insurance options, you’ve likely come across two terms: buildings insurance and contents insurance. Buildings insurance covers you against any damage to the structure of your home, and is usually a legal requirement if you have a mortgage. But what is contents insurance? What does it cover? Do you need it and is it worth the cost?

Here, we’ll answer all your contents insurance-related questions.

Contents insurance: meaning

Contents insurance protects the personal items that make your house a home — everything you’d take with you if you turned your home upside down and shook it. From furniture and electronics to clothes and jewellery, it covers your possessions against risks like theft, fire, and accidental damage.

The value of your household possessions can quickly tally into thousands upon thousands of pounds. Losing your belongings in a fire or flood, or having several valuable items stolen during a break-in, could be financially devastating. Contents insurance offers the peace of mind you need to know that, in the event that anything goes wrong, you’ll be able to replace your damaged or lost goods.

What does contents insurance cover?

The details of every contents insurance policy varies from insurer to insurer and even from policy to policy. Typically, though, contents insurance will cover the cost of replacing the following items:

• Appliances
• Book collections
• Clothing
• Clocks
• Electronics and gadgets
• Fine art paintings or prints
• Furniture, including antiques
• Jewellery
• Rugs and tapestries
• Sculptures
• Unusual, rare, or commissioned collections
• Wine

If you need to cover for specific items not included on this list, like musical instruments, for example, or gadgets and possessions like your phone, laptop or camera, chat to your insurer. These items aren’t always included in every policy, and it’s up to you to read the fine print to ensure you’re covered for the belongings that matter most to you.

Be aware that contents insurance typically doesn’t cover:

• General wear and tear
• Mechanical or electrical breakdowns
• Your home being unoccupied for an extended period

There are also different policies for different types of home occupiers. Homeowners, landlords and tenants all have slightly different needs. Insurers are aware of this, and typically have dedicated types of content insurance available for these groups, which you can then tailor accordingly. Having an experienced broker in your corner can help you find the policy that’s right for you.

Do I need contents insurance?

Contents insurance isn’t mandatory. You can own a home and lease a home (either as a landlord or a tenant) without it. Whether you decide to include contents insurance in your policy is therefore a very personal decision.

As you weigh up your options, start by considering the cost of your insurance against what you would likely have to pay if you need to replace some or all of your belongings. How would you cope financially if you lost a portion of your contents in a fire, flood, or burglary? Would you be able to replace your essential items? What about your more valuable belongings? Make a tally of the value of your possessions and compare this to the quotes you receive from insurance providers or your broker.

Read more: How much is contents insurance?

The following list of pros and cons might be useful, too.

The advantages of contents insurance

• You’re financially protected: The first advantage is the most obvious. With contents insurance in place, you won’t have to bear the cost of unexpected disasters.
• You’ll be able to buy new items: Many policies offer “new for old” replacement, which means your old items will be replaced with brand new equivalents. This can be particularly valuable for expensive goods like electronics or furniture, where the cost of replacing these items often increases over time.
• You might have accommodation cover: If your home becomes uninhabitable due to an insured event, many contents insurance policies include alternative accommodation coverage. This means your insurer will help pay for temporary housing while your home is being repaired. If this is important to you, be sure to confirm it with your insurer.
• You could benefit from accidental damage coverage: Some policies include accidental damage coverage, which protects you against everyday disasters that can be surprisingly expensive, like spilling wine on an expensive carpet or dropping your TV while redecorating. This coverage can be particularly valuable for families with young children.

The disadvantages of contents insurance:

• You’ll need to be able to afford your insurance premiums: Insurance premiums can be pricey, particularly if you choose comprehensive coverage or have valuable items that need special listing. Over time, these costs can add up, especially if you need to make a claim.
• Your policy will likely include an excess: Most policies come with an excess (the amount you need to pay towards any claim), which means smaller claims might not be worth making. For example, if your excess is £200 and your damaged item is worth £250, you might decide it’s not worth claiming for just £50. Not claiming for these smaller issues can help to build up your no-claims bonus, which is beneficial in the long run.
• Your basic policy might not provide all the protection you need: Some common scenarios might not be covered under your policy unless you include them as add-ons. For instance, accidental damage or items taken outside the home (including your phone and laptop) often require extra coverage, making your policy more expensive than the basic premium suggests.
• You might not be covered under certain conditions: Insurance policies come with numerous terms, conditions, and exclusions that you need to understand and comply with. For example, you might not be covered if you leave your home unoccupied for more than 30 days, or if you don’t have adequate security measures in place. If you’re going away for an extended period, look into unoccupied home insurance, and always discuss your safety measures with your insurer.

Does contents insurance differ depending on whether I own or rent my home?

What you choose to insure may vary depending on whether you’re a homeowner, a landlord or a tenant. Let’s take a look at each category one by one.

For homeowners

As a homeowner, you’re responsible for all your belongings. You know what value they hold, and whether you would be able to afford to replace them. You have the freedom to choose the right coverage levels, and you can make permanent improvements to your home’s security to help reduce your premiums. This makes the process of negotiating the right contents insurance simpler and more streamlined.

Many insurers offer combined buildings and contents policies, which can be more cost-effective than having separate policies.

Remember that you don’t have to insure all your possessions. How you configure your contents insurance is up to you. You may only choose to insure your electronics, your antique furniture and your jewellery. Or you may opt for more comprehensive coverage that includes most or all of your items.

For landlords

As a landlord, your contents insurance needs are typically more limited than a homeowner’s or tenant’s, but still important if you rent out furnished properties. Your policy should cover any items you provide, such as furniture, appliances, or curtains, but not your tenants’ belongings.

It’s worth noting that standard contents insurance usually won’t cover rental properties — you’ll need specific landlord insurance that accounts for the additional risks associated with having tenants in your property.

Read more: What landlord’s insurance do I need? An in-depth guide

For tenants

If you’re renting, it’s important to understand that your landlord’s insurance won’t cover your personal possessions. You need to have your own contents insurance to protect your belongings, including your furniture (if you’re in an unfurnished property), electronics, clothing, and valuables.

Tenants’ contents insurance is often slightly different from standard policies, as it’s designed specifically for renters. It might include features like tenant’s liability insurance, which covers accidental damage to your landlord’s property. Since you can't make permanent changes to the property’s security, some insurers offer more flexible terms regarding security requirements, although this might affect your premiums.

Quickfire summary: Is it worth insuring contents?

Unlike buildings insurance, contents insurance isn’t mandatory. You don’t have to have it at all. However, contents insurance provides you the coverage you need in the event that your personal belongings are damaged, destroyed or stolen. Whether the cost of the insurance is worth it will largely depend on the cost implications of replacing your items.

As you make your decision, evaluate the value of your belongings against your monthly or annual premium fees. Often, you’ll find that the peace of mind contents insurance affords is well worth the cost. The team at Howden are on hand to help you find the contents insurance policy that best suits your unique needs — contact us today.

Also read:

• What does home insurance cover?
• Building insurance costs: The lowdown
• Is the landlord or tenant responsible for buildings insurance?

CONTENTS INSURANCE GUIDES