Calculating Need For Home Contents Insurance

Whether a home owner or a renter, having the home's content covered in the event of a disaster or theft can help a person sleep easier. In most instances, a home owner will insure their home against fire and other potential damages and unfortunately, forget about all of the possessions in the home. It isn't until disaster strikes that they realize they should have had home contents insurance as well. Even those that are required to have home insurance as part of the home mortgage agreement often ignore the need to recover their belonging.

For renters, home contents insurance will be needed as in most cases, the owner of the home will have insurance on the structure to cover it in case of a storm. However, that insurance policy will not cover anything that is not part of the building. This means that if the house catches on fire, the owner's insurance will cover the house but if the renter loses everything they own in the house, they are out of luck.

Depending on the age and construction of the home, along with a few other variables, home contents insurance is not overly expensive. There may be some belongings that are not covered under the standard policy that will need its own rider policy, but for most policies, clothing, furnishing and other items can be replaced in the event of a disaster.

Figuring Our Value Of The Possessions

While maintaining a detailed list of possessions can provide an accurate accounting of loss, most home contents insurance companies list possessions by the room. They also have averages of the value of the content of different rooms and, unless the claimed value is considerably higher than the estimates, usually take the homeowner's or renter's word for their loss.

For example, the cost of replacing furnishings in a three bedroom single family dwelling is estimated in most neighborhoods at around $25,000. This type of insurance is usually available for about $100 a year, which is a small price to pay for home contents insurance in the event of major loss.

While renters are usually concerned about their possessions when they buy home contents insurance, they should also look at liability insurance in the event their actions causes major damage to the home. Having their possessions covered by home contents insurance will not help them out if their actions burn down the house and are held liable for the cost to rebuild the home.