Key Facts to Know Before Buying

There are two main types of home contents policy:

1. One that covers the replacement value of everything in your home. This insured amount is calculated by you.
2. A 'bedroom rated' policy from your insurer. This means that the insurer provides an amount of cover based on the number of bedrooms in your home.

You need to decide if you want to use the bedroom rated policy, and let the insurer estimate the approximate the value of your possessions, or whether you would rather calculate this sum for yourself.

There may be other differences between policies such as:

• Cover for bicycles, caravans and boats,
• Cover for freezer contents,
• Cover for garden items or items stored in garden sheds,
• No-claims discounts,
• Cover for replacing doors, or door and window locks following a burglary,
• The amount of the excess you are expected you to pay.

Carefully check the details of policies and see which best suits your circumstances.

Replacement Value

Most policies will normally be 'indemnity' or 'replacement as new'. Indemnity policies are the cheapest, because the company will deduct 'wear and tear' from the amount you can claim for each item. The older the item is, the more will be deducted from the value of your claim. These policies are useful for reducing your premiums if you live in a high risk area.

'Replacement as new' policies have higher premiums, but will allow you to claim for the full cost of replacing or repairing an item that has been damaged or stolen. The insurance company will either send you a cheque that equals the price of buying an identical new copy of the item; or alternatively, they may purchase the items for you themselves.

Accidental Damage

You should also check the accidental damage wording to see what it covers. Does it cover accidental damage to windows and mirrors? Does it cover accidental damage to equipment such as computers, TVs and DVD players? If the cover is not adequate for your needs, you should be able to extend the policy for an additional premium.

All Risks Cover

This is cover for items that you regularly take out of the house,such as cameras or sporting equipment. These items can be listed in the policy under an 'All Risks' section, for which an extra premium is normally payable. High risk items that spend a great deal or all their time outside your home, such like bicycles or caravans, will probably require you to take out specific extensions to your policy.