Household Insurance and the Content of Your House
Your house probably is the most expensive and valuable asset you own. Therefore, you have to take care to protect it with the best home and household insurance possible.
While home insurance cover the structure (walls, foundations, roof, and swimming pool) of your property, household insurance covers your valuable possessions and contents of the house (appliances, furniture and personal belongings). Household insurance will cover all of the above mentioned against any loss due to the events summarized in your insurance policy.
Household insurance gives you the opportunity to place a value on your possessions. This value is the sum that you insure the contents of your house for. The utmost that your insurance company must pay out when something happen to your possessions, is this sum less any excesses (which you are responsible to pay). In the case where your goods prove to be worth less than the insured amount, the lesser amount less excesses will be paid out. This practise is called over insurance and results in you paying premiums for amounts that you will never receive. One can also under-insure - a practise where one valuates your possessions for less than what they are worth in order to save on the premium. This has extremely negative consequences for when your claim gets paid out.
You cannot take out household insurance for only specific items; it covers everything in your home. In the instance of a claim, the insurance company will not pay out the amount it initially cost you to buy the item, but will compensate you with the current price of the item - in other words, most insurance companies work on a bottom-line of "new for old."