Homeowner's insurance for house contents

[ejh]

Hello,

I have homeowner's insurance which covers my property + house contents.
I need coverage for the property - this is something my bank demands with a mortgage - so there's no real question here.

Do I need insurance for the house contents?

* When I say "need" I mean how can I conclude if it's worth paying insurance for my belongings in case of a disaster, theft, etc.

[Kakashi]

This is really a moot question because you can't find a homeowner insurance that doesn't cover the property inside. 

[ejh]

This is really a moot question because you can't find a homeowner insurance that doesn't cover the property inside. 

Mine includes a clause regarding house contents and I pay an extra premium for that.
I can remove it if I want to. Perhaps in other countries it's different.

[TheInsuranceMan]

Hello,

I have homeowner's insurance which covers my property + house contents.
I need coverage for the property - this is something my bank demands with a mortgage - so there's no real question here.

Do I need insurance for the house contents?

* When I say "need" I mean how can I conclude if it's worth paying insurance for my belongings in case of a disaster, theft, etc.

Most home insurance products will be "packaged", meaning they will automatically cover your contents for a certain percentage that your house is insured for.  So, with Nationwide, that number is 70%. 

Example:
If your house is insured at 200k (replacement cost), they'd automatically add $140,000 in contents coverage, which seems like a lot.  However, if you had to replace EVERYTHING in your house, one could eat away at that amount rather quickly (given, you probably still wouldn't touch 140k)

[Goldielocks]

Hello,

I have homeowner's insurance which covers my property + house contents.
I need coverage for the property - this is something my bank demands with a mortgage - so there's no real question here.

Do I need insurance for the house contents?

* When I say "need" I mean how can I conclude if it's worth paying insurance for my belongings in case of a disaster, theft, etc.

Most home insurance products will be "packaged", meaning they will automatically cover your contents for a certain percentage that your house is insured for.  So, with Nationwide, that number is 70%. 

Example:
If your house is insured at 200k (replacement cost), they'd automatically add $140,000 in contents coverage, which seems like a lot.  However, if you had to replace EVERYTHING in your house, one could eat away at that amount rather quickly (given, you probably still wouldn't touch 140k)

I don't think so.  I would only replace what things I immediately need - computer, tv, sofa, bed, kitchen table. A few kitchen items. Some clothing. $15k would go a long way, really. I also have emergency savings.

Most of what I own is second hand or homemade and many items I am sure to get from others second hand if needed for a few years.

[katsiki]

I would get a few quotes reducing that coverage and then compare it to the savings.  You might find you only save $200 / yr.  May not be worth it.

[TheInsuranceMan]

I would get a few quotes reducing that coverage and then compare it to the savings.  You might find you only save $200 / yr.  May not be worth it.

I'll second this.  Any large national carrier will have a better rate (typically) for a dwelling package.  That package will cover your home, 10% of that value for appurtenant structures, an alotted % for household personal property, and some "actual loss sustained" coverage. 

Now, I'm sure you can find quotes to cover your home and do anything else separate, but I doubt the savings will be as much as you hope.  However, check it out, report back, and let us know what you find out!

[bacchi]

I tried to lower my personal contents portion to a more sensible amount. The agent was aghast and even a bit offended.

"I've never heard of that! You'll need to send a letter requesting it."

In the end, it was a negligible difference in cost. I let it slide.

[patchyfacialhair]

TheInsuranceMan summed it up: you probably have 70% of your dwelling limit for personal property. Some companies will allow you to reduce that to 50%. Just ask your agent or call customer service.

Don't expect that to lower your premium too much.

The wife and I carry $20k on our renters insurance for personal belongings. Everything we have was purchased on super sale/gifted. The true value of our stuff is probably $1k in total based on how much we'd get if we sold everything on CL or garage sale'd it.

However if our place burned down, we'd be less inclined to shop for huge bargains and more inclined to replace our wardrobes and get some comparable furniture, quickly. That means that we'd be paying retail for some stuff. The $12/mo we pay for property insurance is well worth it in our opinion. You'll have to decide where you fall on the cost/benefit sliding scale.

[HipGnosis]

This is really a moot question because you can't find a homeowner insurance that doesn't cover the property inside. 

Mine includes a clause regarding house contents and I pay an extra premium for that.
I can remove it if I want to. Perhaps in other countries it's different.

Perhaps it would be prudent of you to tell us what country you are in then.

[formerlydivorcedmom]

My former mother-in-law had a hurricane tear off her roof.  Pretty much all the interior of the house (and the contents) were ruined.

She combined her payout (for house and contents).  She only spent a small portion on replacing stuff.  The rest of it she used to supplement or upgrade the repairs to the house.  She got nicer materials overall, and the house looks great.

[ClovisKid]

Personally, I'd love to not have to pay for the contents portion of my insurance if I could, and if it would substantively reduce my insurance costs.  If I had a fire and lost everything, it might actually be a blessing (forced downsizing).  The only loss that I would regret are personal items like photos, keepsakes, etc.

If you have so much personal property that you have to insure it, then it may be time to re-evaluate your stuff.  If you pay extra to insure jewelry, paintings, collectables, etc. then it either must be a store of value for you (for jewelry, I'd be skeptical that anything besides gold jewelry is) or you are really wealthy and have room to enjoy them.  Otherwise, sell the extras and stop wasting money on insurance.  MMM doesn't even insure his structure (self-insured), let alone all the extra crap inside.

[dogboyslim]

Hello,

I have homeowner's insurance which covers my property + house contents.
I need coverage for the property - this is something my bank demands with a mortgage - so there's no real question here.

Do I need insurance for the house contents?

* When I say "need" I mean how can I conclude if it's worth paying insurance for my belongings in case of a disaster, theft, etc.

Are you in the USA?  That will impact the provisions on the policy.  In the US, there are many options that range from ACV 50% of the amount of property limit to Replacement cost 90% of the property limit.  Best way to find out is to shop around.

To calculate need, figure out the cost to replace all the belongings in your house.  Alternately, calculate the cost to replace "enough" of the contents of your home.  Can you financially handle taking that hit?  If the answer is yes, you don't need the coverage.  If the answer is no, you do.   I wouldn't include the likelihood of the loss taking place in this decision personally.