What Is Contents Insurance?


Contents insurance is coverage for the damage or loss to the items in your home. Your items may be damaged as the result of theft, fire, storms, lightening, vandalism, etc. These items include furniture, clothing, toys, TVs, computers, books, DVDs, CDs, tools, pots, pans, dishes and pretty much every item in your home that you can take with you if you move.

Contents insurance does not cover the building structure itself. Nor does contents insurance cover the normal wear and tear on an item. A computer virus is not covered either.

When you are purchasing contents insurance you will want to estimate how much you will need to spend if the unforeseen disaster happens and you need to replace your possessions. This will help you determine the amount of contents insurance you need to purchase. Usually the contents in a home will run into the tens of thousands of dollars.

If you have more expensive items such as valuable jewelry, a valuable stamp collection, original works of art or heirloom furniture, etc. you will need to add extra coverage for these types of items. Your basic contents coverage will not be sufficient to include coverage for these special expensive possessions.

If you are living in a rental unit the landlord will have insurance on the property itself. It is up to you to carry insurance on the contents of your home. If you are purchasing a property the mortgage lender will insist you carry coverage on the property itself, but they will not insist you carry coverage on your home’s contents.


You can purchase contents insurance which is an indemnity policy. This type policy takes into account the wear and tear on any item for which you make a claim. This means if your TV is damaged and it is three or four years old or more the claim will be paid at a reduced rate because of the age of the item.

The second type contents insurance is new for old coverage. This type coverage will pay for a new item to replace the one lost. Naturally since the coverage pays out more the premiums for the new for old coverage is also higher.

When purchasing your contents insurance find out if you will have coverage for your personal possessions if they are lost or damaged when you are away from home. Does the policy cover legal liability if a visitor is hurt while in your home? Does the policy cover legal expenses you may incur? Will the policy provide coverage if you need to stay in a hotel because your home is not habitable due to a misfortune? Will the policy cover a storage unit if required while you are displaced? You want to discuss all of these points with you insurance agent.

Hopefully you will never need to use contents insurance. However, if you ever experience the loss of your home’s contents you will be very thankful you purchased contents insurance which will allow you to replace the items you have lost. For the peace of mind it provides contents insurance is a very good value. You don’t want to run the risk of losing everything you own and not having the funds to replace them.