This is a complete guide to contents insurance.
In this new guide, you’ll learn everything there is to know about this type of insurance, including:
- What it is
- How it works
- Who needs it
- What it covers (and what it doesn’t)
- If it’s worth it
- And loads more…
Let’s jump right in.
What is contents insurance?
Contents insurance is a type of policy that protects your belongings inside your house.
It covers the cost of replacing or repairing personal items like furniture, electronics, clothing, or toys if they are damaged, lost, or stolen due to events such as fires, floods, or burglaries.
Unlike building insurance, which covers physical structures (like walls, roofs, and foundations), contents insurance focuses on the items inside that you own and can move around.
For example, if a fire damages your sofa, contents insurance would help cover the replacement cost. However, building insurance will be needed for repairs if the fire damages the wall.
Overall, contents insurance is important because it protects the value of your personal belongings against unexpected events that can cause loss or damage.
Who needs contents insurance?
Contents insurance is helpful for anyone who wants to protect the value of their belongings.
While optional, it can save you from significant financial losses if something unexpected happens.
Here’s a breakdown of who might benefit from it:
- Homeowners: If you own a home, you’ve likely invested a lot in furniture, electronics, etc. Contents insurance helps you avoid paying out-of-pocket if these items are damaged or stolen.
- Renters: Since renters don’t need to worry about the building’s structure (your landlord’s building insurance would cover any damages), contents insurance is an excellent way to protect personal belongings.
- Landlords: Landlords who rent out furnished properties may want to insure the furniture and appliances they provide to tenants.
- Families: Families tend to have more personal belongings, from kids’ toys to kitchen appliances, making contents insurance a smart way to protect these items.
It might be less necessary for someone who doesn’t own many expensive items or who can easily afford to replace their belongings.
How does contents insurance work?
The different types of contents insurance policies
There are two common types of contents insurance policies:
- Bedroom-rated: The coverage is calculated based on the number of bedrooms in your home. These policies often have higher premiums and more comprehensive coverage.
- Sum-insured: This type of policy, like the one from Feather, is based on the total value of all your belongings. You estimate how much it would cost to replace everything, and the insurer bases your premium on that value.
How premiums are calculated
Premiums are the payments you make for the insurance. Typically, bedroom-rated policies have higher premiums because they offer broader coverage. Sum-insured policies might be more affordable but depend on the accuracy of your estimate of the value of your belongings.
Disclosure requirements for policyholders
When applying for contents insurance, you must provide all relevant details, such as your address, the value of your items, and whether there are any security systems in place. If there are any changes, like moving to a new address, you must update your insurer to keep the policy valid.
Making a claim: what to keep in mind
If something happens and you need to make a claim, the insurance company will assess whether your policy covers the incident.
It’s important to disclose every detail in your claim. The insurer may deny it if any vital information was left out or incorrect (we won’t though; we’ll just ask you to add more information via the app or the website).
How does contents insurance payout?
There are three main ways content insurance can payout:
- New for old
- Current value
- Excess payment
Let’s break them down…
1. New for old
This type of payout means that if your item is damaged or stolen, the insurance company will pay for a brand-new replacement, even if the original item has lost value over time.
For example, if someone steals your 5-year-old TV, you would receive enough money to buy a new one of the same model.
Feather’s insurance offers this kind of coverage. It’s beneficial because it ensures you can fully replace your belongings without worrying about their current value.
2. Current value (Indemnity-only cover)
With this option, the insurance company only pays for the item’s current value, which is usually less than what you originally paid.
Over time, things lose value due to wear and tear or manufacturers releasing newer versions.
For example, if someone steals your 5-year-old TV, the insurer would only give you what it’s worth today, which might be a fraction of the original price.
This type of coverage can lower your premiums but might only partially cover the cost of buying a new replacement.
3. Excess payment
The excess is the amount you have to pay when making a claim. There are two types of excess:
- Compulsory excess is set by the insurance company and is required.
- Voluntary excess is an additional amount you choose to pay to lower your monthly premiums.
For instance, if your compulsory excess is €100 and you choose a voluntary excess of €200, you’ll have to cover the first €300 of any claim you make. This means if the cost of the damage is €500, the insurance will only pay €200 after you pay your part.
What does contents insurance cover?
Contents insurance covers a wide range of items and incidents. Here’s a quick breakdown…
What it covers:
- Furniture and furnishings: Items like sofas, tables, carpets, and curtains.
- Appliances: Large household appliances such as fridges, freezers, and washing machines.
- Personal belongings: Includes everyday items like clothing, books, and musical instruments.
- Jewelry and expensive technology: Valuable items like jewelry, watches, TVs, phones, tablets, and laptops are also covered, but it’s important to check for specific limits in the policy you opt for.
- Art and ornaments: Artwork, ornaments, and collectibles are insured for damage or theft.
- Food: You can cover the contents of your fridge or freezer, including spoiled food, in case of power cuts or appliance failure.
- Items in sheds or outbuildings: Tools, garden equipment, and even replacement locks or keys in sheds or garages may also be included.
- Borrowed items: Sometimes, items you’ve borrowed and are storing in your home are covered by your insurance policy.
What it doesn’t always cover:
Items kept in a safe are usually not covered, so it’s important to double-check with your insurer if you store valuables in safes.
Feather’s policy includes coverage for home safes and the valuables stored within them.
In fact, these items benefit from higher coverage limits compared to those not kept in a safe.
What it protects against:
Contents insurance covers your belongings specifically under certain circumstances, such as:
- Fire damage: Not just from flames, but also smoke and soot.
- Theft and burglary: Includes repairs to doors or windows broken during a burglary.
- Vandalism and explosions: Even things like a TV imploding from an overloaded electrical transformer can be covered.
- Storm and hail damage: Furniture damaged by rainwater or hailstones leaking through the roof.
- Lightning strikes: This includes damage from electrical surges caused by lightning.
- Damaged pipes: Burst pipes, leaks, or other water damage are usually covered.
Important Note
Insurance policies vary, and coverage can differ between companies. Always review your policy details to ensure you know exactly what’s covered and what isn’t.
If you’d like to get advice for your specific circumstances, please book a call with one of our experts.
What does contents insurance not cover?
Contents insurance comes with certain limitations and exclusions.
While it covers many types of damage or loss, there are specific instances where it won’t provide protection.
Here’s what contents insurance typically does not cover:
General exclusions:
- Unexplained loss or damage: If something is lost or broken without an apparent cause, insurance won’t cover it.
- Wear and tear: Natural aging, general wear, or deterioration over time is not covered.
- Poor maintenance: Damage caused by failing to properly maintain your home, such as ignoring leaks, is excluded.
- Mechanical or electrical breakdown: If appliances or electronics stop working due to internal issues, they won’t be covered.
- Faulty workmanship and DIY errors: Mistakes made during DIY projects or poor-quality repairs are not covered.
- Pet damage: Any damage caused by pets, such as chewed furniture or stained carpets, is excluded.
Specific exclusions:
- Subtenants’ belongings: If you have subtenants, their items aren’t covered under your policy.
- Items insured elsewhere: Belongings covered by separate insurance (like art or musical instruments) will not be included in your contents policy.
- Building components: Building insurance covers the home’s structure, such as walls, roofs, and floors, but not contents insurance.
- Vehicles and watercraft: contents insurance does not cover motor vehicles, trailers, boats, and similar items.
- Bicycles: Bicycles often require specific coverage, and their inclusion depends on the policy. At Feather, you can choose to include it through an add-on, or via bike insurance.
Coverage limits and additional cover:
- Single-item limits: High-value items (like jewelry or electronics) may have a maximum limit. Anything above this limit won’t be fully reimbursed unless additional cover is purchased.
- Accidental damage: Most policies won’t cover accidental damage unless you add it as optional.
- Items taken outside the home: You may need extra coverage for items like laptops or jewelry taken outside the home.
- Unoccupied homes: Unless you have special arrangements, coverage may be void if your home is left empty for 30 or more days.
Exclusions due to the nature of the incident:
- War and civil unrest: Damage from war, civil unrest, or nuclear incidents is excluded.
- Deliberate damage by household members: If someone in your home causes intentional damage, your insurance will not cover it.
- Theft from unforced entry: Insurance might not cover the loss if someone enters through an unlocked door or window and steals something. With Feather’s policy, you can cover these events through one of our add-ons.
How much does contents insurance cost?
Basic contents insurance policies can cost between €2 and €12.5 per month.
For example…
In Berlin, insuring an 80m² apartment with coverage of €50,000 typically costs around €6.50 monthly. This is a relatively low expense, especially when considering the value of your household belongings.
However, the cost of contents insurance can vary depending on several factors, as insurers consider different risks and the value of what you’re protecting.
Let’s break down the key factors that affect the cost:
Location
Where you live plays a significant role in how much you pay.
Areas with higher crime rates or frequent flooding, for example, might have higher premiums because there’s a greater chance something could happen to your belongings.
Value of possessions
The more valuable your belongings are, the more expensive your policy will be.
If you have high-value items like expensive jewelry or electronics, the cost to insure them will be higher.
Coverage for high-value items
If you own costly items, like a rare watch or a piece of art, you might need extra coverage.
These items usually have special limits in a basic policy, so adding extra coverage for them will increase the price.
Type of home
The type of home you live in also impacts your premium.
An apartment in a well-secured building may cost less to insure than a house in a less secure neighborhood.
Occupancy status
Whether you live in your home full-time or leave it unoccupied for long periods affects the price. Homes left vacant for more than 30 days usually require additional coverage because they’re at a higher risk for issues like burglary or water damage.
Security features
Security measures like an alarm system or strong locks can lower your insurance costs.
Insurers may offer discounts if you’ve taken steps to protect your home.
Claims history
If you’ve made insurance claims in the past, your premiums could be higher. Insurers may see you as a higher risk if you’ve needed to make claims before.
Deductibles
Most insurance policies include a deductible, which you pay out-of-pocket before the insurance kicks in.
Choosing a higher deductible can lower your monthly or annual premium, but you’ll have to pay more if you make a claim.
Contents insurance starting at €2.50 per month
Is contents insurance in Germany worth it?
Whether contents insurance in Germany is worth it depends on your needs and financial situation.
Here are some factors to consider when deciding if it’s a good investment for you:
Value of your belongings
If you’ve invested a lot in furnishing your home or own valuable items like jewelry, electronics, or art, contents insurance is definitely worth considering.
Without insurance, replacing these items out-of-pocket could be expensive.
Risk factors
Where you live can also influence whether contents insurance is a smart choice.
If you live in an area with higher crime rates or a history of frequent natural disasters like flooding, insurance is a way to safeguard your home against risks that are out of your control.
Additional benefits
Many contents insurance policies offer extras, like coverage for accidental damage or legal protection, but these add-ons can increase your premiums.
What to look out for when buying contents insurance
When buying contents insurance, it’s important to consider several key factors to ensure you’re properly covered. Here’s what to look out for:
Full coverage
You want to ensure your insurance fully covers your belongings so you don’t receive only partial payments when making a claim.
Here are some things to check:
- Single-item limits: Policies often limit the amount you can claim for a single item. If you own expensive jewelry or electronics, ensure they’re fully covered.
- Excess payments: Find out how much you’ll need to pay before your insurer covers the rest. For example, if you have a £200 excess, you’ll pay the first £200 of any claim.
- New-for-old coverage: This type of policy replaces your damaged or stolen items with brand-new ones, even if the original item has depreciated in value.
- Replacement vs. monetary compensation: Some policies replace items, while others give you money. Be sure to understand how your insurer handles compensation.
- Sets coverage: If one item from a set (like a pair of earrings) is damaged and can’t be replaced individually, ensure your insurer covers the entire set or contributes toward replacing the undamaged items.
Consider additional coverage options
You can customize your policy with extra coverage based on your needs, but these options may increase your premiums:
- Bicycle theft: If your bike, saddle, lights, or basket are stolen inside or outside your home, insurance will pay to replace it.
- Broken glass: Regardless if it’s a regular window, an aquarium, or even your induction stovetop, you’re covered.
- Negligence: An unlocked door that led to a burglary? Did you accidentally leave a candle burning? Even when you’re careless, you’ll be covered.
- Moving expenses: If you can no longer live in your apartment due to an insured event, you can receive €5,000 of support.
Contents insurance starting at €2.50 per month
Contents insurance FAQ
Is contents insurance mandatory?
No, contents insurance is not mandatory in Germany. Unlike required insurance like health or car insurance, it’s optional. However, it’s still highly recommended if you want to protect your belongings from theft, damage, or unexpected events.
How do I know how much my belongings are worth?
To figure out the value of your belongings, go room by room and make a list of everything, including smaller valuable items like jewelry. Consider how much it would cost to replace older items today, as prices might have changed. Once you have a total, get insurance that covers this amount. If you underestimate, you might not get fully compensated in case of damage. Using a tool like a contents calculator can help ensure your estimate is accurate and prevent you from overpaying for insurance.
What is the difference between contents insurance and personal liability insurance?
Contents insurance protects personal belongings inside your home against theft, fire, or water damage. Personal liability insurance covers damages you might accidentally cause to others, such as if you break someone’s property. It’s often wise to have both types, as they cover different risks and are relatively affordable together.
What do I do in case of damage?
If your belongings are damaged, report it to your insurance company immediately. If possible, try to prevent further damage. You might also need to provide proof of the cause, such as a police report in case of theft. This will help speed up the claim process.
Are tenants eligible for contents insurance in Germany?
Yes, tenants can absolutely get contents insurance in Germany. Even though you don’t own the property, you can insure your personal belongings. It’s a good idea to check what insurance your landlord has to avoid overlap and only cover what’s necessary for your own items.
Can I cancel my German household content insurance?
Yes, you can cancel your household content insurance in Germany. Check with your insurance provider to understand their specific cancellation policy, as some may require a notice period, usually around three months before you cancel.
- Cancellation Allowed: You can cancel your German household content insurance.
- Provider’s Policy: Check with your provider for their specific cancellation policy.
- Notice Requirement: Some providers may require a 3-month notice before cancellation.
Where does contents insurance apply?
Contents insurance mainly covers your belongings in your insured apartment. However, it extends to certain other areas, like your study room, basement, attic, terrace, and even common spaces like laundry rooms. It also covers outbuildings on your property and garages located within 3 km. If there’s a storm or hail, your entire property is protected. Some policies also provide coverage for items temporarily away from home, such as a laptop stolen from a gym locker. However, for burglary insurance, it only applies to items inside your home when the theft occurs.
Do you still have any questions?
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Conclusion
Contents insurance is a flexible way to protect your belongings, whether you’re a homeowner or a tenant.
Understanding what it covers, how to value your items, and the process for making claims ensures you’re prepared for unexpected events.
Even though it’s not required by law, having the right coverage offers peace of mind.
