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Insurance glossary

Home and Contents Insurance

Home and contents insurance is a financial product, which in return for a regular payment, pays out compensation if the policy holder's possessions are damaged, lost, stolen, or otherwise damaged.

Home and contents insurance exists in many forms. For example some policies will pay out enough money to replace stolen/lost items with new items, while some will compensate the policyholder with enough money to replace lost/stolen items with equivalents (i.e. second hand items the same age as the ones that were stolen).

A frequent problem with home insurance is that many people underestimate the value of their home contents, meaning that if the worst were to happen, their home and contents insurance would not pay out enough money to replace their lost items.

However, it is possibly to find policies with unlimited cover - or very high basic cover.

A frequent problem with home buildings insurance is that people insure the market value of their property, when they should insure the rebuild costs, i.e. how much it would cost to re-build the home, and not to buy it. These rebuild costs can be worked out here.
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