Contents Insurance is designed to protect you and your valuables. This will usually include all your belongings found in your home or rental and can also cover for damages caused to someone else's property under the Liability benefit. It also covers events like theft, accidents, fire and floods that damage your valuables and require them to be repaired or replaced. If you were to walk into a store and accidentally break something in store, your Contents Insurance (liability cover) will also be there to protect you financially.
It will usually come in two types: new-for-old and indemnity. New for old is where you will be covered for the amount it costs to replace your valuables, whereas indemnity only covers you for the current value of your items (taking into account depreciation, wear and tear). New-for-old policies will carry a higher premium, but will cover more.
Whiteware, laptops, clothes, shoes, mobile phones, TVs, bicycles, sporting goods including watercraft, jewellery, glasses, hearing aids, home office furniture and equipment are common items that fall into Contents. Policies will usually have limited cover for expensive items such as TVs, jewellery and artworks, unless there is a special case on your policy or previous agreement with the insurer.
Contents are valuables that you buy and own over time and will have a value attached to them such as the purchase or replacement cost. If you added all your valuables up, it will likely cost thousands of dollars and more to replace them in an event such as a break-in, a fire or flood. Most Contents Insurance policy will also cover your children and their valuables, even if they are living away at university or boarding school.
We think is worth considering since you only pay a small amount and get the peace of mind knowing that it's all protected.
First, pick a Contents Insurance provider such as AA, AMI, State, Tower or even banks (ANZ, ASB, BNZ, Westpac). Check to see if they offer a bundle discount in combining your existing policies with your Contents policy. Second, have your details ready including your DOB, residential details, and the total value of all your belongings.
Third, pick a plan from Basic or Comprehensive. Many providers will offer two or more different plans, each with their own names. The difference will be the limit set for each item for example Basic may cover your mobile phone for up to $500 but Comprehensive may be $2,000. Other differences may be in optional extras such as carpet coverage.
Fourth, identify the items that are not covered in the policy which need to be noted separately for example, if the policy only covers jewellery for up to $5,000 but you have jewellery that is worth more than $10,000, you’d need to identify these items so you can be covered for it and make future claims.
Fifth, pick your Excess. Typically Excess options range between $500 to $1,500. The higher the Excess the cheaper the premiums (ongoing cost of insurance). Excess is the amount you’ll have to pay when you make a claim. You take away some of the risk that the insurance company takes on so they reward you with a cheaper price (premium). However, make sure you’ve got enough in your bank account to pay the Excess if you did get into an accident or needed to use your insurance. Putting the Excess on your credit card is expensive!
Lastly, check that your insurance cover is still right for you every 12 months or if you have any changes to your family, income or lifestyle. It can be very easy to forget about new valuables that you obtain or sold, which can lead to changes in your policy.
Quashed is an online platform that makes it easy for you to manage and track all your insurance in one place. You’ll be prompted at the right time to check on your insurance, and it helps you keep track of how your premiums are increasing each year.
The cost of your premium is different with each provider and they don't all follow the same guidelines when it comes to calculating costs. Premiums are the on-going payments you make to continue your cover and protection. Below are some of the common factors used in the industry that will play a part in determining your premium.
The region you live in: if you live in a region that they believe to be more at risk to natural disasters, your premiums will increase to match.
Your claims history: the more claims you have made recently, the higher your premium will be. The same also applies if the insurance provider’s data shows that people in your area or similar to you have a higher claim history, resulting in a higher premium.
The items you own: The premium cost is related to the value of the contents you are wanting to insure. If your items are expensive and rare, or if they are likely to get broken, lost or stolen, your premium will increase to match. The same also applies if you have specified items on your policy, which will come at an additional cost shown on your premium.
Your level of cover/plan: The higher the amount of coverage you purchase, and the more benefits and add-ons you purchase as part of a more comprehensive insurance plan, the higher your premium will be.
Home security features: As insurers calculate costs based on risk, if you install (or already have) security features on your home such as burglar alarms and other security systems, you reduce the perceived risk of theft, and so your premium cost will be less.
Your age: Older people seem to claim less and so your age is also taken into consideration especially significant over 55 years old.
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