Contents insurance covers the replacement cost of the contents of your home, whether that is a flat, a house, or something in between. Unfortunately, the people who often need contents insurance the most are the lowest purchasers of it. These are young people, often setting out on their own for the first time, with little money to spare. They skip buying contents insurance, and for some of them that ends up being a very bad choice.
Parents may want to consider purchasing contents insurance for a time while their youngster gets on his or her feet. While the value of the contents may not seem like much to the parents, to a college student or young professional it could set them back for years
Contents insurance can come to the rescue by providing the funds to replace the articles lost to fire, flood, theft or other causes. The biggest mistake people make when purchasing contents insurance is underestimating the value of what they own. Even teenagers may own items of significant value when everything is added together.
Make sure your contents coverage lists all the exclusions, and you’re comfortable with those exclusions. For example, many home insurance policies exclude earthquake damage; does the same apply to your contents insurance? If your expensive Ming vase is destroyed because of an earthquake, will your contents insurance apply?
What about expensive items such as that vase? Does your insurer require a separate rider for those items? If so, how much will that cost on top of the standard contents cover policy? Make sure you factor in everything you need when pricing your contents insurance so that it’s there if and when you need it.