Contents insurance basics- Better options available for cover upgrades
If there’s one thing that routinely drives home owners up the wall, it’s contents insurance. No amount of cover ever seems to be enough. Even more infuriating is how to get a realistic price for the contents onto an insurance policy. The result of these situations is something very like a raffle. Policy holders will be pleased to hear that there are finally some better options coming on the market.
The contents insurance quagmire- Analyzing the issues
The real problems for contents insurance actually come from several directions:
“Replacement cost” of contents can be highly variable, and it’s a frequent source of disputes.
Some insurance companies simply won’t and can’t cover particular types of irreplaceable contents like artwork, etc.
The actual value of things like expensive TVs, etc, decreases both as time goes on and as a result of changes in the retail market prices.
There’s another issue that is also usually forgotten until the subject of contents insurance comes up- The steady accumulation of more valuable contents after taking out a contents insurance policy.
People naturally buy new things like computers, gaming, home entertainment units, etc, and the real value of the contents goes up by several thousand dollars. Most people usually forget the contents insurance issues, or decide to go with the existing policy, assuming they’ve got any losses of pieces of equipment covered.
That’s not necessarily the case, particularly if it’s an older policy. Renewing policies is a ritual. It’s automatic, it’s convenient, and after 5 years your contents insurance could not possibly cover the actual value of your property. The result, equally inevitably, is a long series of “debates” with the insurer, if you actually need to claim.
The insurers aren’t being unreasonable, by the way, when asked to pay for something which wasn’t on the original inventory. They’re trying to avoid being scammed. They may ask for some sort of extra documentation proving the ownership of the property like a bill of sale, which also covers the value. They can then check the average retail price for the property.
This is actually as much of a problem for the insurance industry as it is for consumers. Insurers don’t want to lose customers. Large numbers of people change insurers because of dissatisfaction every day, costing the industry a fortune in premiums. By the same token, making sure that policies are cost efficient is essential.
The solution- Customizable contents insurance
The big breakthrough in dealing with these issues came originally with home insurance. New online insurers developed a type of “paperless insurance”, cheaper for them to operate, which started the move to an upgrade of the whole idea of insurance, including contents insurance.
The idea is simple:
Online policies can be directly managed by policyholders.
Values of policies can be varied easily.
Premium adjustments are automatic.
There are support staff to advise consumers about their options.
This approach has turned out to be the solution. The much less bureaucratic, paperless approach makes it easy to simply modify the policies as required. People may not have time to manually adjust policies but they do have the time to do a few clicks on their computers.