Is your home insurance provides full cover?

Is your home insurance provides full cover?

When you take out home contents insurance (Contents insurance is insurance that pays for damage to, or loss of, an individual’s personal possessions whilst they are located within that individual’s home. ), it’s a good idea to make sure your cover is “new for old”.

This means that, if you have to have a damaged or stolen item replaced, your insurer should pay enough for you to buy a new version.

Some policies only include “indemnity” cover, which will take wear and tear into account and therefore pay out less.

But there are a few catches to watch out for. Many policies will not provide new-for-old cover on things such as clothing, bed linen and even pedal bikes. Check your policy booklet for any exclusions.

Another issue is when insurers agree new-for-old cover on the basis that they can decide on suppliers to replace lost or broken items.

For example, if you had a laptop stolen, you would only be able to get a replacement machine – to the same value – from the insurer’s chosen supplier, rather than exactly the same model again, or its cash equivalent.

And bear in mind that new-for-old cover could be more expensive than an indemnity policy – although many companies now offer new-for-old as standard.

What does Contents Insurance