Contents insurance policies are designed to cover your possessions from loss, damage or theft. Insurers define 'contents' as all those things that you'd take with you if you moved house. So, most policies include things like furniture, carpets, curtains, electrical goods, clothes and valuables such as watches and jewellery.
The cover available falls into two types: 'new for old' policies which means that, if for instance, something is stolen then the payout will be enough to buy an equivalent new item. Indemnity policies, which are often cheaper, payout a reduced amount if you make a claim as they take into account the wear and tear or the depreciation in the value of an item. So, if you lost something you'd owned for a while, you would get back the current value, not what it would cost to buy new.
The amount of cover you'll need, referred to as the 'sum assured' needs to be adequate for your needs so that you don't risk being underinsured. Being underinsured would mean that your insurer might restrict the amount they would payout in the event of a claim. Simply walking around your home with a notebook and pen can help you compile a comprehensive list of what you own. Don't forget to include those things you store away in cupboards, basements and attics too.
Valuable items away from home - You can get cover for belongings you have with you when you're away from home. When taking out a policy, you'll be asked if you require insurance for various items such as mobile phones, laptops, jewellery and cameras. There is usually a limit on the value of any one item, and you may need to specify the items you want to insure.
Cover for additional risks - For further peace of mind, many people opt to pay for additional cover under their policy. You can, for instance, add insurance for legal expenses, home emergencies, drains and plumbing, freezer breakdown, accidental damage to home contents and accidental damage for personal possessions away from home.