Do you need holiday home contents insurance?

Contents insurance coverage is exactly what it sounds like – a safety net for the precious belongings in your home, such as your computer, television, electrical appliances, furniture, curtains, clothes, and other items of value. 

Most content insurance policies cover you for damage caused to your belongings by events like storms, flooding, fire, lightning, theft, and vandalism. Some insurers also offer accidental damage protection that could help you if you accidentally damage or break something in the house, such as staining a carpet by mistake. 

You can compare various insurance policies to find the level of coverage that’s right for you. When comparing options, remember to read the terms and conditions carefully to find out about any limitations or exclusions to the coverage. For instance, some content insurance policies may not provide coverage for precious items, like your jewellery or a rare art collection. If you have any precious installations or items at your holiday home that are not adequately covered by a standard contents insurance policy, you may want to consider purchasing additional coverage. 

Depending on your requirement, you can choose to buy a separate contents insurance policy for your belongings (such as when your holiday home is covered by strata insurance) or consider a bundled home and contents policy. Some insurers offer combined building and contents coverage at reduced rates compared to purchasing two separate policies. 

The type of insurance cover you choose also affects the cost of your insurance. Many insurance providers offer what is often called a ‘new for old’ cover. While this kind of coverage typically comes at a higher cost, it provides more comprehensive protection. If you select this option, the insurer will cover the entire expense of replacing the damaged items with new ones. 

Another option is insuring your items based on their actual value. Here, the insurance provider will only cover the value of your possessions which could depreciate over time. Opting for this type of policy often results in lower premiums compared to a 'new for old' policy. However, remember that the payout you receive in the event of a claim may not be sufficient to purchase a new item of similar quality. 

There is no legal requirement to buy contents insurance for a holiday home. However, it may be worth purchasing a contents cover to shield yourself from the financial burden of replacing or fixing items in your holiday home in case they get damaged due to unforeseen events you can't control. 

Besides providing a safety net for your belongings against unexpected events, some insurance policies offer coverage for damage caused by tenants, which could be an important consideration if you rent out your holiday home.

Depending on the level of coverage you buy, a contents insurance policy may also cover you for any liability in case someone is injured while they are in your home. However, this coverage may not extend to rentals. Remember to check the terms and conditions of your policy to confirm whether the liability protection coverage extends to situations when your holiday home is leased out.  Alternatively, you may consider a landlord insurance policy for more comprehensive coverage if you plan to rent out your holiday home.