The Fine Print: Why Contents Insurance May Not Fully Protect Your Most Prized Valuables

Taking out contents insurance and not doing your proper due diligence could be a very costly mistake for policyholders. In this blog post, we will discuss why in some cases your contents insurance policy will not be enough to cover all your valuables due to some common clauses that insurance providers have in their terms and conditions.

Why some clauses in your contents insurance policy may severely limit your claim on your most prized belongings

It is vital you read the small print and talk through your policy extensively with your agent to make sure you are actually getting the cover that you need. All too often people end up going to make a claim for contents insurance and realise that many of their most valuable items are not fully covered by their policy.

Typically, most insurers in Ireland will base their contents insurance products on a certain percentage of the total sum that the property is insured for.

For example, a customer has insured their house for a total sum of €300,000 and their household contents insurance gives them cover for 20% on contents. This means their maximum cover for contents is €60,000.

On the face of it, this seems like a perfectly adequate amount of your contents covered, and it will easily cover the vast majority of your most precious valuables if some loss event were to occur.

However, there may be additional restrictions that can affect how much you can claim under your policy, such as a single article limit and a valuables limit.

If we take FBD’s policy for example, FBD have a single article limit of 5% of your overall contents sum insured. This means that no single item claimed for can exceed 5% of your total insured amount ( in the case of your earlier example this would amount to €3,000).

You can see how this could become an issue where you have one single items that is quite valuable and well in excess of this 5% limit.

Similarly, FBD have an additional valuables limit of 20% limit of your total insured amount for all high risk items combined.

There are also some other reasons why you may not receive the full reimbursement for your claim, such as wear and tear deductions and underinsurance.

Your contents sum must be of adequate to replace all items as new, if you insured amount is set too low then you will only receive a portion of the claim.

What is the best practice for insuring your most expensive valuables?

You may have certain valuables that are well more than the single article limit set out by your insurance provider that will require a different approach to just a general contents insurance policy.

For these items it is possible to get specified items cover to ensure that you are not underinsured for your most valuable possessions.

What is covered by contents insurance in Ireland?

The following are typical items that may be covered by your contents insurance policy:

  1. Cash
  2. Furniture: Sofas, chairs, tables, and other household furniture.
  3. Appliances: Refrigerators, washing machines, dryers, and other household appliances.
  4. Electronics: Televisions, computers, laptops, tablets, and other electronic devices.
  5. Clothing: Clothes, shoes, and accessories.
  6. Jewelery and watches: Engagement rings, watches, and other valuable pieces.
  7. Artwork and antiques: Paintings, sculptures, and other valuable items.
  8. Sports equipment: Bicycles, golf clubs, and other sports equipment.
  9. Musical instruments: Guitars, pianos, and other musical instruments.

What is covered may vary depending on your provider. Make sure to double-check with your insurance provider what is in scope under your own policy.

What proof do you need to make a claim under contents insurance?

If your claim relates to items stolen during a burglary, then this must have been reported to the Gardaí.

Ideally, the process will be a lot smoother if you have some evidence that you purchased the item, such as a receipt or invoice. This might not be possible for all your belongings that have been passed down through generations, but if you have photos and a detailed description of what has been stolen then this will be sufficient in most cases.

If your claim is for a personal belonging that has been damaged, then do not dispose of any damaged items as your insurance provider may want to assess the damage as part of the claims process.

Now that you have learned about protecting your contents, maybe you would be interested in learning how to protect yourself against rising inflation?

Disclaimer: This blog post is for informational and educational purposes only and should not be construed as financial advice.

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