Contents Insurance
Contents insurance is another important financial tool that can help protect your personal belongings in the event of theft, damage or loss. It can cover a wide range of items including furniture, electronics, clothes, and jewelry. While it may seem like an unnecessary expense to some, the cost of replacing these items can quickly add up in the event of an unexpected disaster. Additionally, contents insurance can provide peace of mind knowing that your possessions are protected and you won’t have to worry about starting from scratch in case of a disaster.
Contents insurance usually covers clients’ belongings when they’re at home or temporarily moved elsewhere in the country.
Contents insurance is also offered at different levels:
- Basic policies may only pay the “present value” for the client’s contents (the cost of repairing or replacing an item, so they are left with something in the same general condition). Some policies only cover items damaged by defined events such as fire and theft. Others provide limited or no cover for items damaged while they’re temporarily removed from their home.
- Comprehensive policies offer a mix of present and “replacement value” (that’s the cost of replacing the item or repairing it to an as new condition). This also covers clients’ contents for accidental damage – not just defined events – in your home and while they’re temporarily removed.
It always pays to check details of the cover: what’s standard in one policy may be an optional benefit in another – or may not be covered at all. This includes credit cards, Jewellery, keys and locks, professional tools and equipment kept at home, and items damaged during cleaning.
Some insurance companies require a valuation certificate for items over a certain amount.
Excesses
If a client makes a claim against their house or contents policy, they will probably have to contribute the first few hundred dollars towards the repair or replacement. This is called excess.
The standard excess for house and contents claims is between $250 and $400, depending on the insurer.
Clients need to think carefully before making a small claim. They can end up with a higher premium as well as an excess when their policies get renewed. They can also lose their no-claims discount – and this discount can reduce their premium by as much as 40%, depending on their policy.
EQC Cover
Client’s house insurance premium includes a levy that goes to the Earthquake Commission (EQC).
The Earthquake Commission’s cover is called EQCover. This is applicable after an earthquake or other natural disaster but they usually must have private insurance to be eligible.
EQCover pays:
- For damage to home and contents
- For damage to land, under homes and within eight meters of a residential building and structures. Land under or supporting the main access ways (but not the driveway paving itself), up to 60 meters from their home, is also covered. There is some cover for bridges, culverts and retaining walls.