Home & Garden Improvements

Whereas home insurance covers the structure of your home contents insurance covers your possessions. There are two basic types of cover, ‘indemnity’ and ‘replacement as new’.

Indemnity

Indemnity policies, also known as ‘cost of repair’ policies, take wear, tear and depreciation into account when settling a claim. Indemnity policies generally have lower premiums than replacement as new policies, but both types come with an excess that must be met before the insurance goes into effect.

Replacement as New

Replacement as new cover, also known as new for old, typically covers all household items except linen and clothing.  While replacement as new policies will cover the full cost of replacing an item that is lost or stolen, they are also more expensive to purchase than indemnity policies.

Exclusions and Inflation

Both indemnity and replacement as new content insurance come with exclusions and/or limits to the amount that is covered. People who own highly valuable items such as artwork, jewellery or expensive ornaments, should seek out special insurance to cover them.

While most content insurance is also linked to the inflation rate, which ensures that your cover increases accordingly, there are a few policies that don’t take inflation into account. It is important to always check before committing to a policy.

Sub-letting

Sub-letting increases risk and therefore most policies have a clause that allows them to withdraw cover should you decide to let your house or apartment. So, if you are thinking about sub-letting, be sure to discuss your options with your contents provider beforehand.