I was sitting at my desk when my phone rang. It was my wife, "We've been robbed."
Someone had broken into our garage and taken our bikes. We're not avid bikers. We didn't have bikes that cost more than my first car. Still, the combined loss was about $800.
The police were about as helpful as they could be. There was a slim chance that they would find a homeless guy riding one of our bikes and they hadn't scrapped off the serial number. The bikes were gone and we weren't going to get them back.
The worst part of the ordeal was that I had planned on getting contents insurance. I had planned on it. A plan that never materialised. I'm sure some of you are out there are thinking the same thing. You'll get insurance tomorrow, or maybe next week. If you're reading this site, you probably have a nice HDTV, a few computers, a console or two, and maybe even a few Roombas cruising your living room picking up crisp crumbs. The point is, you have lots of cool stuff and if it gets stolen or destroyed, and you don't have contents insurance, you're pretty much screwed.
If you own your home, you're probably already covered by your combined buildings and contents insurance. But for many of us, we're living in someone else's place and we should start protecting our stuff.
Contents insurance protects you if your items end up in the hands of criminals and more importantly, if there's a disaster, like a fire that ravages your home. If you live in an a block of flats, the fire doesn't even need to be in your flat for your stuff to get destroyed. When the fire brigade arrives on the scene, one of the first things they do is cut holes in the top of the building. Water is then poured into those holes. If you're stuff isn't melted by the fire, it can be destroyed by water or smoke. So when the guy in flat 5B starts a fire with his new deep fryer, it's your fancy MacBook Air and PlayStation 3 that pays the price.
When shopping for contents insurance you should consider what would happen in the event of total loss. That way if you lose everything, you're not starting over from scratch. Make sure your policy is large enough to replace your belongings. In event of total loss, some policies even help cover the cost of hotel rooms. Helpful if you live in an area without family or friends that don't mind you crashing on their sofa for a while.
Insurance typically runs from £100 to £300 depending on how much coverage you need. If you own £30,000 worth of audio equipment, it'll probably run you a bit more. If you do have the first guitar Jimmy Hendrix ever played, the iPhone owned by Steve Jobs, or any other collectables including expensive jewelry and fine art, you should look into having those items insured separately on personal item insurance.
Another thing to take into consideration is what disasters aren't covered. I live in California and I have fire, hail, riot, volcano, etc, etc, coverage on my policy. But, I have to pay extra for earthquake insurance. It's more likely that an earthquake will destroy my stuff than a volcano erupting down the street and covering my items in molten lava. Flood insurance in another extra. If you live in a low-lying area that's prone to flooding, be sure to add it to your coverage.
Now that you have your insurance, it's time to start cataloging your stuff. Create an inventory of all your belongings with photos and as much detail as possible. The model, serial number, the size of the internal storage or screen. The more detail, the better. don't forget to take pictures of your items. It's easier for you and the insurance company to replace an item if you both know exactly what it looks like and can prove you own it. Keep a copy of the list in your home, preferably in a fire proof safe. Send a copy to a friend or family member to keep one off-site. Update this list regularly, especially after the holidays.
If the worst does happen, most insurance companies have operators standing by 24/7. While loss is easier to document. A fire burns through your building or a plane lands in your living room, that's pretty easy to document. Theft on the other hand is a bit more difficult to prove. Be sure to call the police right away and file a report to get a crime number. Some policies have a limit on how much coverage they have for stolen cash and jewellery. Check your policy and adjust it if needed.
I know, insurance is boring. And cataloging your stuff, holy crap that sounds like the worst weekend ever. But, it's better than staring at the holes where your bikes used to sit and wondering if you have enough cash in the bank to replace them.