On paper one of the easiest forms of insurance to calculate would appear to be contents insurance, either home or office. Yet this is not necessarily the case. To recap, contents insurance is supposed to compensate the policy holder for goods and possessions that are not permanent fixtures of your home. This is where the confusion can sometimes begin.

The best example would be if a kitchen bursts into flames and is totally destroyed. Let’s hope it never happens, but if it id, basically the policy holder would have to fill in two separate claims, one for the kitchen units and any built in appliances, such as stove or a hub. The refrigerator and/or the dishwasher would be included in house contents. Why? Because they are not an integral part of the kitchen and can be moved.

The most common causes for insurance claims for contents are fire, flood and theft. There are a few others that come up from time to time, such as trees falling onto your house, cars, buses or trucks driving through your house, acts of god, and acts of war and so on. It is always worthwhile to thoroughly check with your insurance company against which calamities they issue cover. You can never be too sure!

Other factors that will affect house contents insurance costs is the location of the property, its security systems, whether it is left un-attended for long periods, history of previous claims among others. Most insurance companies will also consider “add-ons” such as insuring goods stored in outhouses and garages (not cars) food in freezers and assorted anomalies.

The next slightly grey area as far as insuring your contents is whether you are being covered for replacement value against current market value. If your home is filled with valuable persona; heirlooms antiques, art collections and valuable jewelry then you will find that your premiums will be very high, but will reflect the replacement value or at least the emotional value if they are unable to be replaced.

The average man in the street is not usually faced with such problems. They have to contend with another dilemma which can be extremely larger. It arises when the insurance company will assess their possessions according to current value and not replacement value. For example if someone has a ten year old television, the insurance company will only cover the policy holder to replace it. Unless the policy holder insists differently.

If the policy holder is prepared to pay a considerably increased premium, they can insure the entire contents of their home against total loss and replacement at current values. This can make for a very expensive policy. Most people who take out house contents insurance take the sensible approach of looking at the cross section of the value of their “depreciateable possessions” and do their sums accordingly.

Overall house contents insurance need not be that high, and especially if you don’t have a few diamond necklaces around. An average appraisal of house contents would place them at a value of 200,000 rand and annual insurance costs should be around 3% of that figure, or around 6,000 rand a year. One of the best investments you will ever make, that hopefully you will never need to use,