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Insurance Article

How Does Content Insurance Work?

May 29 2015

Find out how to get adequate protection for your possessions

Most people are under the misconception that under this policy, the insurer will replace the concerned item with a brand new one. To get a clear picture about content insurance, one should understand the extent of coverage and calculate the value of your contents.

Calculating Value of Contents

When you file a claim for any damaged contents in your house, the insurance company will pay you the current market value of your possession after factoring depreciation. Current market value is the current market price of the item, while depreciation calculates the decline of that price based on wear and tear.

Content Insurance Covers Against?

Content insurance covers several household items from damage caused by natural or man-made causes like:

What Is Not Covered?

  • Gold bullion and unset precious stones
  • Cash and cheques
  • Important documents
  • Antiques and works of art
  • Fire
  • Storms, lightening and floods
  • Riots and malicious damage
  • Earthquakes and landslides
  • Bursting pipes and water tanks
  • Aircraft damage
  • Damage due to impact of vehicle

Burglary and Theft
Content insurance also reimburses losses due to robbery and theft. If you’ve been robbed, your insurer will compensate you for all the contents that were stolen. However, any theft committed by domestic help is not insured under this policy.

Terrorism Cover
This optional cover protects the contents of your home from acts of terrorism. This additional rider is only valid for the first year of your policy.

Important Note: 
Loss or damage of any item outside the confines of your house is not covered in the content insurance policy. The concerned item has to be inside the house when it was damaged or stolen. In case of a burglary, your insurer will require a FIR (First Information Report) from the police that states the list of articles stolen from your house.

Which Contents Can Be Insured?


Protect your house and everything in it

Several personal possessions and household contents, including jewelry, can be insured under this policy. Following is a list of common contents that are insured by homeowners:

  • Household appliances: Refrigerators, AC, washing machine, etc.
  • Furniture and Fixtures: Sofa, bed, fan, lights, etc.
  • Clothes
  • Utensils
  • Consumer durables
  • Jewelry

Before purchasing content insurance, estimate the total worth of your contents by calculating the current market price of your possessions. Furthermore, retain all the bills and invoices as evidence, which will help speed up your insurance claim.

Jewelry and Precious Articles

Under content insurance, the entire cost of jewelry might not be reimbursed. For example, some policies cover jewellery only up to Rs. 1 lakh. A claim for theft of jewelry will only be processed if the valuables were kept under lock and key or in a safe. Therefore, it is advisable to keep extra jewelry and other expensive items in a bank locker.

All homeowners and tenants should consider buying content insurance as part of their home insurance policy, in order to protect their assets against untoward losses.

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