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Hints and tips on the basics of home contents insurance

Contents insurance is a specific type of insurance cover for the goods and possessions in your home. This, most people know. However, not everyone is sure about the finer details, meaning they are sometimes over- or under-insured and therefore end up paying too much or too little for their insurance.

So, let's take it back to basics with these handy hints and tips on exactly what home contents insurance is all about.

What am I covered for?

Contents insurance covers damage from fire, burst pipes, flooding, vandalism, rioting, storms, falling trees, moving objects and explosions. Most of today's more comprehensive policies also include cover for accidental damage, particularly broken glass, TVs and computers; damage to TV and radio aerials and satellite dishes; theft of cash from your home; key replacements and costs incurred from calling out a locksmith as well as legal liability cover if a visitor has an accident in your home.

However, as insurance costs rise, many insurers are offering greater flexibility, allowing you to choose exactly what you want included in your insurance policy and therefore giving you greater control over the price. Legal and General home contents insurance for instance is split into two levels: essentials and extra cover.

How do I work out the value of my home contents?

It may seem tiresome, but the only way to calculate the value of your contents is to go through your home, room by room, and write down everything you see, including clothes, music (even the items stored on a computer) and products given as presents. This takes some time, but it is well worth it. If you underestimate the value, you might pay a lower premium, but when you come to claim the payout will be less than the contents.

Bear in mind most insurance policies won't pay the full value of all items. If you have an Ikea sofa that's 10 years old, you can't expect to get the full purchase price back as wear and tear is taken into account.

There are home contents calculators to help you; Legal and General has one in fact. But you will still need to know the value of the items in your home.

Is home contents insurance compulsory?

Unlike car insurance, home contents insurance is not a legal requirement and unlike buildings insurance it is not required to obtain a mortgage. However, if you know you won't be able to afford to replace all your possessions yourself if they were damaged in a fire or flood, contents insurance is a good idea. Buying combined building and contents insurance works out cheaper than buying two separate policies.