When someone refers to getting insured, health insurance, life insurance, car insurance, and home insurance may pop into mind. But have you heard about contents insurance and why you should have it?
What Is Contents Insurance?
Contents insurance covers all of the possessions that are located within the home of an individual. It seems very similar to homeowner’s insurance but serves a very distinct purpose.
Contents insurance covers a lot of things that homeowner’s insurance won’t. These insured possessions can include items like televisions, art, electronics, furniture, and other valuable items that you have in your home and would lose if there was a theft or fire. Homeowner’s insurance covers the house itself and the structures that are attached to the home in the event of an accident or catastrophe. Most policies however are not equipped to deal with the possessions in your home. That is what makes contents insurance so valuable.
Why You Need Contents Insurance
Contents insurance matters because having a physical home is only one part of a picture. An empty house could easily cost thousands and thousands to refurnish. Contents insurance will pay for the replacement of your stuff. You may not be able to replace the sentimental value of certain items but you can replace the monetary value of them.
You can protect your stuff through contents insurance by making a list of all of the items in your home. I’d also suggest taking pictures and noting down the serial numbers of your electronics. You can then use this documentation in the future if you ever have to make a claim. Remember not to store this info in the house itself since it could easily be lost in whatever event that would cause you to need it.
How To Get Contents Insurance
You can contact different insurance agents and get a few quotes on policies in your area. Many insurance companies will allow you to add an additional policy to your current homeowner’s policy, but some companies will require you to purchase a totally different contents insurance policy. The amount of money that the policy costs will depend a lot on the number of items that need to be covered and their dollar value. A homeowner with a few basic possessions will pay a lot less for coverage then a homeowner with high dollar collectible items and precious jewelry.
My Take on Contents Insurance
Our homeowner’s insurance policy covers the contents of our home up to half of the insured value of the house itself. In our case, that means we have about $75,000 of contents insurance, which is way more than we’d need. Just in case we ever do have a fire or are hit by bandits, I have taken pictures up close of our most expensive belongings as well as general photos of every room of our house. I also made sure to take pictures of the serial numbers of our computer, laptops, and television. I keep the actual printed photos at my in-law’s house and have them on a flash drive at home as well.
In short, if your house burned down, would you simply need it rebuilt or would you prefer having a bed to sleep on too?
Crystal Stemberger uses Budgeting in the Fun Stuff to write about finding the balance between paying your bills, saving for your future, and budgeting in the fun stuff along the way.