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What is contents insurance (and when do you need it)?

Have you bought enough home insurance? A comprehensive policy covers your home against someone injuring themselves on your property and damages to the building be it from a storm or vandalism. It also gives you contents insurance covering your valuable possessions, but not everything. There are special cases where personal belongings may need a little extra coverage – that’s where an added endorsement for contents insurance comes in to play. 

What is contents insurance?

Contents insurance covers loss or damage to the personal belongings you keep in your home, such as jewellery, clothing, appliances, electronics, art, or sporting equipment. But what many homeowners don’t realize is that even comprehensive policies limit the amount the insurance company will pay out for specific items that are lost, stolen or damaged.

As reported by CBC News, Annie and Stuart Brown lost their St. John’s, Nfld. home in a fire in 2013. While they quickly settled on an amount to cover the loss of the house, they were still arguing with the insurer over contents insurance a year later. Stuart, an archeologist, had a collection of rare items from his excavations that he says was insured for $396,000, but the insurer only offered a quarter of that amount.

Contents insurance is for homeowner’s – be it on a home or condo insurance policy. If you’re renting, it’s arguably the most important part of your tenant’s insurance. Apart from third-party liability – protecting you if someone were to injure themselves in your apartment, contents insurance covers all your belongings – TV, furniture, clothing, appliances, etc. that aren’t part of the home itself.

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What are contents insurance limits?

It’s important to do your homework and determine what limits your home insurance policy includes. Atlantic Canada-based Anthony Insurance (part of Intact Insurance), for example, typically insures watercraft up to $2,000, animals up to $1,000 and computer software up to $1,000. For items that are lost or stolen, it covers jewellery, watches and furs up to a total of $10,000, but only up to $2,500 for each item. Lost coin or stamp collections will be reimbursed for up to $1,000, and comic book or sport cards collections up to $500. Each bicycle and its equipment is also covered for up to $500.

The Co-operators has slightly different limits: each piece of jewelry is insured for up to $4,000, with a $6,000 maximum for the entire collection. Stamp and coin collections are insured up to $3,000 and bicycles up to $4,000 each.

Aviva also has its own rules. It will reimburse damaged, lost or stolen jewelry, watches and fur garments up to $6,000, and doesn’t specify a per-item limit. It insures each bicycle for up to $1,000, collectibles such as comic books up to $5,000 per loss, coin collections up to $500 in total and stamp collections up to $2,000 in total.

TD Meloche Monnex will vary their limits based on the policy you have with them. Their comprehensive policy has no limits on computers and other electronics, $2000 per bike and up to $4000 in jewellery insurance.

RBC’s limits are $1,000 per bike, $6,000 for jewellery, and $15,000 for a piece of art.

But you can always add more when you add a contents insurance endorsement policy to your home insurance current policy.

How much contents insurance should I have?

Insurance companies also offer endorsements or riders, which are extra insurance policies to cover contents or incidents not included in the standard contract. Take the time to calculate the replacement costs of your valuables. If they’re over the per-item limits of your policy, decide if you want to take a risk and self-insure the rest, or if buying an endorsement makes sense.

While contents coverage is just one consideration when buying home insurance, make sure you think about these special limits before you sign a policy. If you’re a cycling nut who has three pricey racing bikes in the garage, don’t be content with a policy that will only pay out $500 if one is stolen.

If you inherited your great-grandmother’s diamond necklace but are otherwise happy with costume jewellery, a policy with a generous per-item limit makes more sense, even if the overall limit is lower.

As always, we recommend calling your insurance provider to see what they cover and what their limits are per item. If you find you need more contents insurance and the price for an added endorsement to your existing policy is too much, shop around for home insurance quotes to find a provider more suitable for your needs.

Does car insurance cover my stuff?

The short answer is no. Your car insurance does not cover the contents within your car. The contents in your car are covered by your home insurance policy. If someone breaks into your automobile, your auto insurance will cover damage to your vehicle.

As an example, if someone breaks your car window and steals your laptop, the broken auto glass would be covered under your auto insurance policy. Your laptop would fall under your homeowner policy—subject to your deductible. If deductibles apply to both your auto and homeowner insurance, you usually have to pay the higher of the deductibles that apply.