What is contents insurance?
Not all contents insurance policies are created equal, though, so read on to learn what they cover, what they might exclude, and how they vary depending on your housing situation. Simply, contents insurance is a part of your home insurance policy. It provides financial compensation in the event that your personal belongings become damaged or destroyed due to various circumstancesor if theyre stolen. Contents insurance policies can differ somewhat depending on your living circumstances: If you own a detached house, a condo or townhome; or if you rent. But its ultimate goal is the same: To pay you partial or full replacement costs (or, if applicable, repair costs) of the items in your home that were damaged or lost. An average contents insurance policy covers a wide range of potential perils that could impact your belongings, including fire, smoke and water damage, theft, vandalism, windstorms and hailstorms and falling objects. Depending on where you live, you may choose to add an endorsement (additional coverage) to your policy that protects your contents from an earthquake or overland flooding (meaning a flood originating from outside your house or building, due to a rainstorm or a burst dam). Since these events are rare and tend to be specific to certain geographical locations, they arent automatically included with contents insurance policies. (Find out if you need to add on flood insurance to your policy.) Compare personalized quotes from some of Canadas top home insurance providers*  Typically, a contents insurance policy covers your belongings up to a certain agreed-upon dollar amount. Before shopping for a policy, the first thing youll want to do is take a thorough inventory of your possessions and calculate their total value. The amount of coverage your policy provides should allow you to replace all or the majority of the contents in your home. Its important to know, however, that a basic contents policy does contain limits and exceptions for certain categoriesso youll want to discuss these with your insurance broker to find out if your policy needs to be tailored to give you all the coverage you need. An example of a limit would be jewellery, explains Jessica Asano, vice president of Thunderbird Insurance in Victoria, B.C., and vice president of the Insurance Brokers Association of B.C. A lot of policies would have a limit of, say, $10,000 for jewellery or watches. If youve got a $20,000 engagement ring and a $15,000 watch, you would want to do whats called a scheduling of that itemyou would pay extra to have it listed on your policy. So, your policy would have all your other coverages, and then it would say, Scheduled Items: 1. Rolex, and so on.