What exactly is contents insurance?
Contents insurance safeguards the value of your things when they break, go missing or are stolen from your home. If the unthinkable happens, your insurer either pays for the replacement cost of your belongings or for repairs.
It covers a long list of everyday perils, including theft and vandalism, fire and smoke, storms and flooding, burst pipes and water leaks. It is the natural counterpart to buildings insurance, which covers the structure of your property rather than what is inside it. Many households buy the two together as a combined home insurance policy.
For a quick definition of any term used here, our home insurance jargon buster explains the most common phrases in plain English.
What does contents insurance cover?
As a rule of thumb, anything that is not bolted down to the floor can be covered by contents insurance. Think of your TV, computer, clothes, jewellery and even furniture. If something happens to any of it, you can claim compensation.
Rugs, ceramics, pictures, books and even your music collection are also included if disaster strikes. Higher-value kit such as racing bikes and professional cameras might be better served by specialist equipment cover, which is more suited to big-ticket items.
Typically covered
- Theft and vandalism (usually with signs of forced entry);
- Fire, smoke and explosions;
- Storms, flooding and burst pipes;
- Furniture, electronics, clothing and jewellery up to set limits.
Commonly excluded or extra
- General wear and tear or mechanical breakdown;
- Deliberate damage you cause yourself;
- Theft with no sign of forced entry;
- Items taken outside the home, unless added as an extra.
For the full picture of where a policy stops, read our guide on what home insurance does not cover.
How much contents cover do you need?
One of the first questions you might have is how much cover is enough. To avoid being part of the roughly one in five households who are underinsured without realising it, you need to look at all your possessions and decide how much it would cost to buy everything you own all over again.
The best way to do this is to think bigger than being burgled. Imagine your home has been completely emptied or destroyed. Going room by room, add up how much it would cost to re-purchase all your things. Use this checklist to jog your memory:
- Kitchen: cutlery, microwave, toaster, kettle, pots and pans, glassware, plus the washing machine, fridge and dishwasher;
- Bedroom: pillows, duvets and bed covers, jewellery, the best of your wardrobe, the mattress and the bed frame itself;
- Living room: the TV, sofas, cushions, games console, rug, books, DVDs and any furniture such as cupboards and curtains;
- Shed, garage and loft: tools, bikes, garden equipment and anything else stored away that still holds value.
Get ready for a surprise when you total it up. A writer at Confused.com came up around £15,000 short when she double-checked her first appraisal. After this exercise you will be far better prepared to settle on a realistic level of cover. The calculator below can help you sanity-check your estimate.
How much does contents insurance cost on average?
There is genuine debate about what the average cost should be. Money Supermarket has estimated around £76 a year, while the Association of British Insurers (ABI) has put it closer to £139 a year. That is a steep difference, which proves it is worth shopping around to find the best deal for your situation.
The main factors that move your contents insurance quote include:
- Your postcode: county, town and neighbourhood crime and flood risk all play a part;
- Your home type: a flat and a semi-detached house carry different risk, and homeowners and tenants are priced differently;
- Security: reinforced locks, smoke alarms and burglar alarms can improve your premium or excess;
- Your claims history: a string of past claims marks you as higher risk, and switching does not erase that in the short term;
- Your circumstances: age, household size and the number of dependants can all affect the premium.
Investing in home security is one of the few levers that can both protect your belongings and bring the premium down.
New-for-old vs indemnity: choose the right cover
There are two kinds of contents cover, and they pay out very differently. The one you pick changes both your premium and what you receive after a claim.
| Policy type | What it pays out | Best for | Premium |
|---|---|---|---|
| New-for-old (as new) | Full replacement cost of a brand-new equivalent item, with no deduction for age or wear. | Electronics and items that stay easy to replace, where you want a like-for-like swap. | More expensive premium. |
| Indemnity | Current second-hand value, reduced for wear and tear and depreciation. | Older belongings of modest value where a lower premium matters more than a full payout. | Cheaper premium. |
Indemnity policies are almost always cheaper than new-for-old, because they deduct for wear and tear before paying out.
If most of what you own holds its value and stays easy to replace, such as electronics, a new-for-old policy is usually worth the extra. If your average item value is low, an indemnity policy is a solid, cheaper bet.
Single-item limits and high-value belongings
Most policies set a single-item limit, meaning the maximum they will pay for any one possession. Anything that tops around £1,000 in value typically counts as a high-value item, and these often carry their own cap on how much the insurer will compensate you.
Jewellery, watches, musical instruments, bikes and art frequently sit above this threshold. If you own anything in this category, checking the limits and listing each item separately on the policy is your first port of call, otherwise a claim payout might fall short.
Keep your cover accurate whether you are downsizing or moving up. Many contents policies let you adjust your sum insured during the year, which is useful around occasions such as holidays or a wedding, when expensive presents may be in the home, or when family members move out or back in.
Accidental damage and optional extras
A basic policy does not cover every mishap, so insurers let you tailor cover to your needs. The most popular add-ons include:
- Accidental damage: a relief if you are clumsy or have a lively pet or child, covering possessions that are knocked over, dropped or broken;
- Personal possessions cover: protects items taken outside the home, such as a laptop nicked from a cafe, which the basic plan may not cover;
- Home emergency cover: brings out a tradesperson fast for issues such as a burst pipe or a broken boiler, with priority service and less paperwork.
If you rent, the rules of thumb differ slightly. See our dedicated guide to contents insurance for tenants, and our overview of home emergency cover.
How to get good contents insurance without overpaying
Here are our tips for decent contents cover you can easily afford:
- Pay annually rather than monthly, as monthly instalments work like a loan and cost more overall;
- If you own your home, bundle contents with buildings insurance for a combined home policy at a lower price;
- Consider raising your voluntary excess, which lowers the premium, as long as you can afford the excess if you claim;
- Skip extras you will not use, such as away-from-home cover if you rarely take valuables out;
- Invest in home security, as strong locks, alarms and motion-activated lighting deter thieves and can cut your premium;
- Compare like for like at every renewal, matching the same sum insured and cover level so you are not caught out by the unexpected.
When the time comes to claim, our step-by-step home insurance claims guide walks you through the process.
Contents insurance FAQ
All material on this page and the selectra.co.uk website is for information purposes only and does not constitute any form of financial advice. Selectra.co.uk is not responsible for any consequences that might arise from your use of the information provided.