Does your contents policy cover your fancy e-bike?

Keep on top of your contents insurance. It’s something we don’t think about when we buy new toys, such as jewellery, kayaks and electric bikes.

It’s the electric bikes that really made me think about this issue, thanks to a release by AA Insurance about the growing problem of theft. E-bikes are expensive things to lose.

Up until now I would have had no idea if my contents policy covered an e-bike. A read of my policy said “yes” but not for replacement value.

There are many more reasons to have contents insurance than just owning a few expensive things that you can’t afford to replace.

Young flatters and people living in apartments often think they’re immune from theft or burglary, says Insurance Council of New Zealand chief executive Tim Grafton.

The I’m-too-poor or minimalistwho-owns-nothing crowds can still benefit from many other aspects of contents insurance such as legal liability if you damage other people’s property.

Grafton cites the example of knocking over a poorly placed barbecue while on holiday or damaging someone’s car while riding your bicycle. Contents insurance covers your legal liability in those instances.

It also pays for temporary accommodation if your rental or own home is damaged to the point where it becomes unliveable.

When reading my policy, I was surprised to see that this also covers pets. Many Canterbury residents would know all about this thanks to the earthquakes and West Aucklanders after the recent flooding.

I suspect like me few people think what would happen to their pets in the unlikely event of their house being destroyed. Most likely you’d be living in a rental for six to 12 months, and most don’t take pets.

Not all insurance policies are created equal. “Replacement” policies may only replace certain items and pay current market value for others.

Some items are only replaced new for old up to a certain age, says Grafton.

“For example, if whiteware is over the age detailed in your policy then your insurer won’t replace it but will cash settle for the indemnity (current market) value,” says Grafton.

If the only valuable items you own are a MacBook, latest iPhone or electric bicycle, do check that these are covered up to the full value. Most policies have sub-limits on certain items.

It’s important to know, Ron Mudaliar, chief underwriting officer at Tower, says. With e-bikes, for example, customers need to compare the bike’s value to their single-item limit in their policy, which most policies available in NZ will have.

If the bike or other item is worth more than the single-item limit, you’ll need to specify it separately on your policy and pay a small extra premium.

That’s especially the case with policies aimed at renters. Having said that, I did read AA Insurance’s Limited Contents Insurance Policy and AMI’s Standard policies and they did mostly what a renter might need.

Contents insurance will usually cover your belongings anywhere in New Zealand, which is useful when holidaying within the country. But your contents insurance doesn’t give you all the cover of a travel insurance policy such as rental car excess and flight cancellations or delayed travel.

Another cover included in many contents policies that can be useful in the world we live in is for illegal use of credit and debit cards, albeit limited to a sum such as $1000.

If you’re a parent your policy may cover your university-age children living in halls of residence, although the devil is in the detail of your policy.

Life moves on and if your situation or family has changed it’s a good idea to check that your policy still meets your needs.

You may need higher limits on valuables or you might even have joined the e-bike owning cohort. All policies have sub-limits on items such as jewellery, bicycles and work tools and computers.

You may need to tweak yours, pay for a policy extension, or take out a more comprehensive policy.