Questions such as the difference between the building and the contents in home insurance and how it is calculated are common when taking out a policy.
It is common to have doubts about certain technical concepts when taking out home insurance . The case we are dealing with in this post is about the differences between the building and the contents of a property and how to calculate their value when taking out home insurance.
First of all, it is necessary to be clear about the difference between container and content:
- The container : A very clarifying and frequently used simile to define it is that if we turned the house upside down, everything would still be in its place. This would be the container. That is, all those components that make up the construction of the house such as foundations, walls, roofs, windows, water and electricity installation, etc.
- Contents : This would be everything that would fall if we went around the house. Everything that the owner or tenant has added to the interior of the property. In this section we would include appliances, furniture, personal items, clothing, etc.
How to calculate the building and contents when taking out insurance?
It is important, before taking out the policy , to make a good assessment of the building and the contents of the home , since, if you are not careful, you could end up paying more or, on the contrary, paying less and the policy not covering all the necessary aspects. At this point, let us remember that the owners will have to insure both the building and the contents ; if you are a tenant , you will only have to insure the contents .
To calculate the CONTINENT value of a property:
The value of the building is calculated based on the construction value of the house , that is, what it would cost to rebuild a wall, a roof or some installation in the event that the house suffered a serious accident.
To make the calculation, the square meters of the property will be multiplied by the construction cost . At this point, we would like to emphasize two important clarifications : the value of the building is not the same as the purchase value or the same as the sale value. The value is calculated based on the cost of repairs in the event of an accident. On the other hand, the value of the building does not include the price of the land.
To calculate the CONTENT value of a property:
Considering that the contents can contain a great number of things, we recommend going through the rooms of the house and making an inventory of everything that could be affected in the event of theft or accident. If you have objects with a special value , we recommend that you notify the company and deal with the matter specifically. As for the rest of what is considered contents, its value is usually calculated based on its purchase value. In general, the total value calculated is usually around 30% of the value of the building.
Finally, in the case of calculating the contents when taking out home insurance , it must be taken into account that over the years, residing in the same home, the volume of the contents may vary, therefore, it will have to be updated periodically.
With all this, it is understood that depending on the valuation we make of the content, the price of the premium will depend on the content we include in our valuation, which is why it is recommended to be as careful as possible, so as not to pay more and not to leave out of the list anything that we are interested in having included in the policy coverage.
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