What is contents insurance?
Contents insurance is coverage for your personal property that's part of your standard home, condo, or tenant insurance policy. It protects your belongings from common perils like:
- Fire
- Smoke
- Water damage
- Theft
- Vandalism
- Windstorms
- Hailstorms
- Falling objects
Contents insurance provides financial support if your items are damaged, destroyed, or stolen, covering everything named in your policy that's listed in your home, garage, and backyard shed up to your maximum policy limit.
While other components, like dwelling coverage or personal liability protection, cover different risks, having contents insurance is key for protecting your possessions. Whether you own or rent, the right contents insurance can cover things like:
- Furniture
- Appliances
- Clothing
- Electronics
- Bicycles
- Home decor
- Jewellery
- Musical instruments
- Sporting equipment
All insurance policies have a maximum limit. However, there are additional limits you can get for certain high-value items like antiques, instruments, jewellery, and cash. If you own valuable items, you might want to add extra coverage or consider switching to a high-value home insurance policy for more protection. You can also add coverage for things like sewer backups or overland flooding if those are concerns in your area.
Types of contents insurance
Contents insurance coverage is there to protect your belongings if something happens, as outlined in your home, condo, or tenant insurance policy. It either covers the actual cash value (ACV) or the replacement cost of the items you've lost.
Insurance companies have two ways of valuing items: actual cash value (ACV) and guaranteed replacement cost. ACV is the amount it would take to replace or repair an item after accounting for depreciation. Replacement cost, however, is the amount you'd need to replace the item with a new one. Let’s take a closer look at each option.
Actual cash value (ACV)
Imagine you had a candle burning, and your cat walks by and knocks it over. It sets fire to your couch. You manage to put the fire out before it spreads anywhere else, but the couch is ruined. This couch is 15 years old. With actual cash value (ACV), you'll be paid what a similar used couch would go for today.
ACV is what an item would sell for today, not the price to buy a new one. So, if you need to make a claim, you likely won't get enough to replace the couch with a brand-new version. Instead, you'll get the current value, which has probably decreased since you bought it 15 years ago.
Because ACV coverage pays out less, it's usually more affordable than replacement-cost insurance. However, keep in mind that if you need to make a claim, you might have to pay out of pocket to cover some of the cost yourself to get new items.
Guaranteed replacement cost
Guaranteed replacement cost is the amount your insurance company would pay to replace your belongings if they're stolen or damaged. It gives you enough money to replace lost or damaged items with new or comparable ones. So, in this case, you'd be given enough money to buy a new or comparable couch.
The main benefit of this type of insurance is that it covers the full cost of replacing your personal property. Even if an item has depreciated in value, like a 15-year-old couch would, you'll still get enough to buy a new or comparable one. However, keep in mind that this coverage usually comes with a higher premium than ACV coverage.
People often underestimate the value of their belongings, and going for the cheapest insurance might not give you enough protection. While you might save on premiums, it could cost you a lot more to replace everything if something unexpected happens. You can ask your BrokerLink insurance broker for home insurance advice to find out which type of contents insurance would work best for you.
What does insurance not cover?
While contents insurance can cover many scenarios, there are a few situations homeowners and renters should keep in mind. For example, some common exclusions include:
Also, having something in your home doesn't guarantee it's covered by your contents insurance. There are certain items that typically fall outside of coverage. These exclusions include:
- Some types of electronics
- Some types of high-end jewellery
- Some types of sporting equipment
- Sometypes of valuables/collectibles
- Home business property
- Large amounts of cash
- Motorized vehicles, like cars, motorcycles, four-wheelers, or ATVs
Also, while other belongings in your garage are covered, this does exclude vehicles, because they're covered by your auto insurance policy. However, if someone breaks into your car and steals something like a laptop or musical instrument, your contents insurance would cover it, even if the theft happens away from home.
How much insurance do you need?
Contents insurance covers your belongings up to a set dollar amount or limit. If you own your home, this coverage is usually a percentage of what your home is insured for. If you're renting, contents coverage and third-party coverage are typically included in your tenant's insurance.
As we mentioned, people often underestimate the value of their belongings. To figure out how much coverage you need, it's best to go through your home room by room and make a home inventory list. Then, total up the value of your belongings. Your policy limit should be enough to replace most or all of your belongings.
Policy limit defined
Your policy limit is the maximum amount your insurance company will pay out to repair or replace your personal property after you have experienced a covered loss. You can find this limit detailed in your home insurance policy.
While standard property insurance will often cover enough for personal belongings, there are times when it won't be enough. If you own valuable items, for example, such as jewellery, artwork, and musical instruments, or you have a large collection of something like vinyl records, it’s worth considering extra coverage for a higher policy limit. Talk to your BrokerLink broker about how much extra coverage you'll need to protect these items or if you should consider switching to a high-value home insurance policy.
How much does content(s) insurance cost?
Contents insurance is included as part of home and tenant insurance policies, where home insurance premiums can vary because it depends on what you're insuring. Since there are so many ways to customize your coverage, the best way to find out how much a policy will cost is to get a quote from an insurance company or broker.
Each company has its own way of calculating costs, but some factors that can affect the price include:
- Whether you rent or own
- How big your home is
- Your coverage limit
- Whether you opt for replacement cost or actual cash value
- Your insurance deductible(s)
- Your location
- If you need additional coverage for high-value items
- Any exclusions on your policy
- Your claims history
- Your insurance provider
For an accurate quote on home insurance with contents coverage, reach out to BrokerLink. Our insurance advisors will take the time to get to know you and compare multiple quotes from top Ontario insurance companies to find the best coverage at the right price for you.
How do I submit an insurance claim?
While there are plenty of things you can do to help prevent a home insurance claim, sometimes you'll still need to file one. But don't worry. Filing a contents insurance claim works just about the same way as any other home insurance claim. Let's break it down into easy-to-follow steps:
1. Call the police
If your personal possessions have been damaged or stolen, start by calling the police to report the crime. They will want to come and make a report of what happened, and you can get a copy of this report later to give to your insurance company.
2. Document everything
When it’s safe, make a detailed list of everything that was damaged, destroyed, or stolen. Take photos of any damaged items, and check your home inventory list for pictures of anything that was stolen.
A quick tip: Hold on to damaged items unless they’re dangerous or a health hazard. Make sure to check with your insurer before getting rid of any damaged property.
3. Contact your insurance provider or broker
Get in touch with your insurance provider or broker as soon as possible after a theft or property damage to start the personal insurance claims process. You’ll need to give them complete, accurate details of what happened and the damaged or missing items, so the sooner you start, the easier it’ll be to remember everything. Thankfully, most insurance companies offer 24-hour claims service.
Once you file your claim, a claims specialist or adjuster will get in touch with you. They'll go over what happened, look at the documents you provided, and walk you through the next steps.
4. Fill out the paperwork
After you file your claim, your insurance company will ask you to fill out a "proof of loss" form. This form lists all the items that were damaged or lost.
For each missing or damaged item, you'll need to provide the following:
- What the item is
- The brand and model of the item
- How old the item is
- How much the item originally cost
- Where you purchased/received the item from
- If you have them, the original receipts or warranties
- A picture of the item
You'll need to sign and confirm that everything you’ve stated is true. If any information is false, your insurance could be voided.
Usually, you have 30 days to complete and return the proof of loss form to your insurance company. If you have any questions, your BrokerLink insurance broker or claims adjuster can help you out.
Content insurance from BrokerLink
At BrokerLink, we're here to help you protect your home and personal belongings from whatever may come. Our goal is to find you the best coverage so you don’t have to worry if the unexpected happens. We can also review your home insurance policy to make sure you have the right amount of coverage for your needs. Plus, we can help you save money on your home insurance premiums by bundling your insurance with other policies, like your car insurance.
So don't wait. Contact BrokerLink today! You can reach us by phone, email, or in person at any one of our locations throughout Canada. We also encourage you to take advantage of our free online quote tool that can provide you with a competitive quote in minutes.
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FAQs for contents insurance
What is content insurance?
Contents insurance covers your personal property if your belongings are damaged, destroyed, or stolen. It is a key part of home, condo, and tenant insurance policies.
What does insurance cover?
Content insurance provides financial support if your items are damaged, destroyed, or stolen by common perils, including fire, smoke, certain types of water damage, theft, vandalism, windstorms, hailstorms, and falling objects.
Is it worth having contents insurance?
Absolutely. Without contents insurance, you would have to pay out of pocket to replace all of your belongings after they were damaged, destroyed or stolen.
Does content insurance work differently for renters than homeowners?
Not really. While home insurance policies are different for renters than homeowners, since renters don't own the physical building or unit they're renting, the contents portion of the policy works the same. It protects your belongings from covered perils.
Is content insurance mandatory in Ontario?
No. Both home insurance and renters insurance, which include contents coverage, are not mandatory in Ontario. However, they are highly recommended. Further, many mortgage brokers or landlords will require insurance coverage in order to approve a mortgage or rental lease.
