For most people, after your home, the contents inside it will be the most valuable assets you own. If the unforeseen happens and your home or its contents are stolen, damaged or destroyed, a good contents insurance policy is vital.
This guide will explain what you should consider to make an informed choice about the best contents insurance policy for you.
What is contents insurance?
Contents insurance covers the damage or loss of personal possessions like household possessions, clothes, appliances, furniture, carpets, or curtains caused by events like fires, floods, burglary or earthquakes.
If you are flatting or renting, it is a good idea to ensure your policy includes personal liability cover for damage to the property you live in.
Compare contents insurance policies with our top insurance partners.
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Comparing Levels of Contents Insurance in NZ:
Fully Comprehensive vs. Basic Cover
Contents insurance is an essential protection for your belongings, providing coverage against loss, theft, and damage. In New Zealand, there are different levels of contents insurance available, including fully comprehensive and basic cover. Each option comes with its own advantages and disadvantages. This article aims to explore the differences between these levels of contents insurance, allowing you to make an informed decision based on your specific needs and budget.
Fully Comprehensive Contents Insurance:
Fully comprehensive contents insurance offers the highest level of coverage for your belongings. It provides protection against a wide range of risks, including accidental damage, theft, fire, natural disasters, and more. Let's examine the pros and cons of fully comprehensive contents insurance:
Pros of Comprehensive Contents Insurance:
a. Extensive Coverage: Fully comprehensive insurance offers comprehensive protection for your belongings, ensuring they are covered against a wide array of risks and perils.
b. Peace of Mind: With comprehensive coverage, you can have peace of mind knowing that your valuable possessions are protected in various scenarios.
c. Additional Benefits: Some fully comprehensive policies may include additional benefits, such as temporary accommodation if your home becomes uninhabitable, cover for high-value items, and personal liability coverage.
Cons of Comprehensive Contents Insurance:
a. Higher Premiums: Fully comprehensive insurance typically comes with higher premiums due to the extensive coverage it offers. Policyholders should consider the cost implications when choosing this level of coverage.
b. Policy Exclusions: It's important to review the policy details carefully, as certain items or events may be excluded from coverage. Understanding the exclusions is crucial to ensure you have appropriate coverage for your specific needs.
Basic Contents Insurance:
Basic contents insurance, also known as standard or essential cover, provides a more limited level of protection for your belongings. It typically covers the essentials and basic risks, such as theft and fire. Let's explore the pros and cons of basic contents insurance:
Pros of Basic Contents Insurance:
a. Affordability: Basic cover is generally more affordable compared to fully comprehensive insurance, making it an attractive option for budget-conscious individuals.
b. Essential Protection: Basic contents insurance still provides coverage for common risks, such as theft and fire, ensuring that your essential belongings are protected.
c. Simplicity: Basic cover policies often have simpler terms and conditions, making them easier to understand and manage.
Cons of Basic Contents Insurance:
a. Limited Coverage: Basic contents insurance offers a narrower scope of coverage compared to fully comprehensive insurance. It may not cover certain perils, such as accidental damage, natural disasters, or specific high-value items.
b. Potential Gaps in Coverage: With basic cover, there is a higher risk of gaps in coverage, as certain items or scenarios may not be included. Policyholders should carefully assess their coverage needs to ensure they are adequately protected.
Choosing the Right Contents Insurance Level:
When selecting the appropriate level of contents insurance, it's essential to consider your individual circumstances, budget, and risk tolerance. Fully comprehensive contents insurance is suitable for those seeking extensive coverage, with protection against a wide range of risks. However, it may come with higher premiums. On the other hand, basic contents insurance offers essential protection at a more affordable cost, but with limitations in coverage.
Additional Factors to Consider when you Compare Contents Insurance:
Policy Limits: Regardless of the coverage level, ensure that the policy limits are sufficient to cover the value of your belongings. Underinsurance can lead to inadequate compensation in the event of a claim.
Deductibles: Review the deductible amount, which is the portion you're responsible for paying out of pocket when making a claim. Higher deductibles may result in lower premiums but require a larger contribution in the event of a claim.
So how should you choose which Contents Insurance?
Contents insurance is a vital component of protecting your belongings from unexpected events. Fully comprehensive contents insurance offers extensive coverage, providing peace of mind for policyholders but comes with higher premiums. Basic contents insurance, although more affordable, offers limited protection. Consider your budget, the value of your belongings, and your specific coverage needs when choosing the appropriate level of contents insurance. Carefully review policy details, exclusions, limits, and deductibles to ensure you have the right coverage for your circumstances.
SPONSORED OFFER - AMP contents insurance makes it easy to get a quote and easy to buy.
Types of content insurance cover in New Zealand
As with all types of insurance, you should consider the type of insurance that suits your needs, and how much you want to pay for insurance.
Most contents policies will have limits on the amount you can claim for valuables, jewellery, money, documents and collections.
Levels of contents insurance cover include:
- Replacement cover – your insurance company will replace lost or destroyed items with a new one, or repaired it as new. There are some limits to this type of cover:
- Items over a certain age may not be replaced
- If you make a claim and you wish to receive cash, you may only receive the indemnity value
- There is an upper limit on what can be claimed for some type of items, this will be specified in the insurance policy as the "sum insured".
- Indemnity cover (present day value) – this type of cover pays however much the item was worth at the exact time of loss or damage. This means the items are depreciated based on age.
Compare contents insurance quotes with our top insurance partners
- At Money Compare we are here to help you make an informed choice about contents insurance – we work with some of New Zealand’s top insurance companies.
- We recommend requesting quotes from more than one provider, so that you can compare the costs side-by-side.
- Requesting a quote online is fast and easy – it only take around 10 minutes to collect two or three quotes.
- Switching insurers can help save you money – most insurance companies offer attractive deals for new customers.
- We recommend comparing insurance quotes and reviewing your policy every year to ensure the information in the policy is current, and that the cost remains competitive.
Tips to reduce your contents insurance premiums
- Maintain a good claims history: this may help ensure that you can get cover without additional terms like an excess. A good claims history can also help keep the cost of your insurance down, as some insurers base their pricing on number of claims.
- Compare several quotes: shopping around and comparing quotes can help make sure you get cost effective cover. Consider the cost of the policy, premiums, and the benefits included in the policy (more comprehensive policies cost more, but offer more comprehensive cover)
- Ask if a no claims discount is available: Some insurers offer a discount if you haven't made a claim, which could help reduce your renewal insurance premium.
- Increase your home security: some insurers will reduce your premiums if you have security alarms and smoke alarms installed, have locks that meet certain standards, install security lighting and use a safe
- Choose a level of cover that meets your needs and matches your budget
- Increase your excess: This is the amount of money you have to pay when you make a claim, before the insurer covers the rest of the cost. Increasing your excess sometimes results in your premium being refuced.
- Only add benefits that you need: as these will increase the cost of your insurance
- Pay annually: Paying for your policy annually instead of monthly, can work out cheaper. So it’s worth checking whether there is a price difference for paying annually.
- Ask about discounts for multiple policies: some insurers offer discounts for multiple policies with the same insurer (eg: car insurance or contents insurance), or for professionally installed security systems
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