What will be your life without a television, washing machine, laptop computer or air conditioner? Luxury apart, in today's world life is mostly based on some of these electronical items. Right from entertaining ourselves in front of the idiot box to cooking in microwave oven, our life to a large extent is dependent on these man-made items. Which is why life without these contents seems to be unimaginable. On the other hand, to avail benefits of these contents one needs to shell out bucks from his/her pocket.
Insurance coverage of house contents is not mandatory, yet most of us would find it difficult to re-purchase or replace these precious items if stolen or damaged by fire or a flood. Therefore, it becomes very necessary to insure these contents in your home along with your house insurance. An ideal combination of home and contents insurance can be found by a comparative study. However, before getting any such home and contents insurance comparison, it is important to understand the concept of content insurance cover.
What is content insurance cover?
As the name suggests, an insurance policy which provides coverage to house contents against loss or damage by theft or attempted theft, fire, explosion, lightning or earthquake. in the event of loss or damage due to theft, dacoity, burglary, flood, earthquake, water leakage, storm or flood damage.
Insurers define 'contents' as “the sort of things you would take with you if you were to move house.” These contents include clothes, money and jewellery, furniture and electrical items. Particular plans in contents insurance also provides protection with respect to fixtures such as carpets and curtains.
Types of content insurance cover:
There are two types of content insurance cover. First - 'As new' or 'new for old'. This indicates that in case of a damaged, the insurance policy will reimburse the complete cost of repair. However, in case of theft, the reimbursement will be sufficient to buy the similar new content. However, items which are covered under this category differ from company to company. For instance, generally clothes and apparels are not considered in this form of insurance.
Second - indemnity policy. These plans are cheaper because reimbursements in this category are decided after considering the wear and tear or depreciation in value of the content. Like, claim on a five-year-old laptop will depend on its current value and not the purchase price.
How many contents cover do you need?
Experts state that one out of every five households are generally underinsured as they do not know the actual value of the contents in their house. It is important to note that in the event of claim settlement, the maximum amount your insurance policy will reimburse will not exceed the sum insured. Therefore, to quote the right insured amount for your policy, it is vital to keep a record of all your contents and their values.
Do you require additional contents cover?
The option of extending your policy to avail additional cover is always with you. But this comes at a cost of extra premium. Some of the common extensions are accidental damage cover, home emergency cover, children who leave house for higher studies, etc.
Tips for cheaper contents insurance:
* Get house and content insurance quotes comparison from different insurers.
* Make annual payment of premiums as monthly direct debit can often lead to additional charges
* Reduce your pemium if you dont need additional covers
* Buying both home insurance and content insurance from the same insurer will get you a better deal
* At the time of policy renewal, earn no claims discount, in case you haven't filed for any claim with your insurer.
House insurance in India is still not very common. But it is never too late, precaution is always better than cure. And by buying a house and content insurance you might just save yourself from an unforeseen loss.