Insurance is not the most exciting subject in the world and as a result it is also one of the most misunderstood. If it hasn't already happened to you, it is almost certain that you have heard stories of people having their entire games collections stolen or lost in a flood. If you value your games collection, then you really should insure it. This guide aims to cut through the small print that dominates insurance and tell you everything you need to know about insuring your collection.

Q1. Do I have to insure my games collection?

No. Insurance on personal goods is not compulsory like it is for third party car insurance. However, unless you can easily afford to replace your collection or feel that there is no risk whatsoever, then insuring your property is a wise option.

Q2. What will insurance cover me for?

Most personal insurance policies are written on an "perils" basis. This means that provided the cause of a loss is listed in the policy and the property is not excluded, the loss or damage to the insured items will be covered. Do not assume that an insurance policy will cover you for everything (the name comprehensive insurance is a little misleading and is typical of the insurance industry's approach).

The primary causes of damage that are covered are: fire, theft, explosion, lightning, falling aircraft, flood, storm, burst pipes, malicious damage, vehicle impact, earthquake and subsidence. As an option, an additional premium can be paid to cover accidental damage to property (dropping, knocking things off a shelf, etc).

Not all loss or damage will be covered. It is not the intention of the insurers to cover damage as a result of wear and tear, pets, vermin (rats, cockroaches and the like), damp and dry rot, war, sonic bangs (damage caused by the shockwaves of aircraft flying at supersonic speeds) and radioactive contamination.

Most policies will contain some kind of excess that will exclude the first £50 or £100 from the claim. This may sound a little unfair on the policyholder, but the principal is to exclude any tiny claims. Insurers incur costs whenever they deal with claims (insurance staff and loss adjusters don't work for free) so they want to avoid dealing with any claims for a £5 pen for example.

Occasionally, you may see a policy with a franchise instead of an excess. These work in a similar way, except the entire claim is paid if the loss is over the specified amount. For example, on a policy with a £50 franchise a claim for £49 would not be covered, whereas a claim for £51 would be paid in full. These are not very popular with insurers though as they encourage policyholders to increase their claims in order to reach the franchise threshold, but a few franchise policies still exist.

In addition to covering your contents, a typical contents policy will insure your personal liabilities too. This has nothing to do with games or property, but is very useful if you accidentally run someone over whilst on your bicycle and are sued!

Q3. So once I get insurance, I can just sit back and relax right?

Not quite. Any insurance policy will have certain conditions and warranties that must be adhered to. You can't leave your home unattended with all the doors and windows open and expect the insurers to pay when thieves have cleaned you out.

The policy will stipulate that any security devices (locks on doors and windows, alarms if you have one) must be set when the property if left unoccupied. If you live in a high-risk area or have a large sum insured, the insurers may insist that certain security devices are fitted and put into operation. Details of these will follow later in this FAQ.

One condition that all insurance policies contain is that the policyholder must maintain "reasonable care" of their possessions. The meaning of this open to interpretation, but leaving a Gameboy on a train or failing to secure a roof that has been leaking for a long time may be construed as unreasonable by the insurer. In most cases, common sense prevails and provided you sensible about protecting your goods you should have no problems.

Q4. So how do I go about insuring my games collection?

For the majority of people, the cheapest and easiest way is to buy a home contents policy. You cannot insure only part of your contents so you will have to value all of your belongings in the home. Household policies have some of the widest cover in the insurance market and there are many insurers to choose from. If you have to insure your buildings, these can also be added to the policy although it is not essential.

It is up to the individual whether they wish to obtain quotes from insurers direct or approach a broker to do the work for them. Some people insure through their bank, but sometimes this can be more expensive. Most of the time though, premiums are usually fairly similar for household insurance, but it is wise to obtain a few quotes. The core covers rarely change from insurer to insurer, but a few companies sell their policies on the basis of extra covers thrown in. If you have a particularly large house, you may fit into the acceptance criteria of a "high net worth" policy. These polices often have additional benefits like annual travel insurance or zero excess.

Q5. What are the things I need to look out for when buying a household contents policy?

You need to watch out for three things: high-risk limits, making sure you insure for the full value of all your contents and disclosing any "material facts".

Q6. High-risk limits?

This is a very important area concerning consoles and computers. Most insurers regard consumer electrical equipment, jewellery, fine art, antiques and valuables as "high risk" items. Some policies have an inner limit for the total of these items and/or a single item limit for each item or set. The limits vary between insurers, but £7,500 or a third of the total contents sum insured is not uncommon for the total and £1,000 for each individual item.

The limits vary from insurer to insurer, as can their definition of high-risk items. Some companies will include just hardware, e.g. stereos, TVs consoles, PCs etc, but others will include the software, such as CDs, DVDs, videos and games.

Royal Sun Alliance under their Choices Extra policy regard high-risk items to be only jewellery, watches, clocks, articles of precious metal and furs. They only have a single article limit of £1,000 with no overall limit.

The legal and general on the other hand regard all electronic equipment to be high risk and the total value must be disclosed.

Make sure you ask the company before proceeding with the quote and better still disclose in writing the value of all the valuable items you have broken down into categories, plus the value of the most expensive item. Always check the small print of the policy to make sure.

Q7. Why is it important to insure all my contents for the full amount?

It is very important to get the sums insured right on any policy, because of a clause called "average". Average is not very well understood, but it can have a devastating effect on a claim. You may consider that a thief would not possibly get away with more than £7,000 of property, so why is it necessary to insure for more? Well besides the fact that theft is not the only peril (fire will often totally destroy everything, as can adverse weather), the average clause will reduce your claim.

The principal of average is that the insurers can reduce payment on a claim by the percentage you are under insured. For example, Mr Jones has a total of £15,000 worth of high-risk contents as defined by his policy including a plasma TV. A burglar pays a visit whilst he is out and steals the plasma and some games, a total claim worth £9,000. The high risks items limit is £10,000. As the claim is under this amount, Mr Jones thinks the claim will be fully covered. Unfortunately not.

The average clause means that the insurers will only pay a proportion of the claim if the property is not fully insured. Although the cover was provided was £10,000, Mr Jones should have insured for £15,000. A claim of this size will nearly always result in the insurer appointing a loss adjuster to review the claim for both parties. Adjusters are independent and can be a great help to the claimant, but they do have report their findings to the insurer. If the adjuster notices the high-risk items should have been insured for £15,000 when he visits the home, he will have to advise the insurers. If the insurers feel that the high risks limit was under insured, they will reduce the claim by that amount. In this example, Mr Jones only insured for 2/3 of the correct value, therefore the insurers would be perfectly entitled to only pay 2/3 of the claim, reducing it from £9,000 to £6,000.

Insurers won't generally be concerned with average if the claim is borderline, but if the figures are wildly different, the insurers are entitled, as per the policy wording, the reduce the claim.

In short, if you are going to insure, make sure you do it properly.

Q8. So how much should I insure my property for?

That is an impossible question to answer. No two people are the same and neither are their possessions. For some £10,000 might be more than adequate, for others it wouldn't even cover the contents of the bathroom.

For a three-bedroom property with 2-3 occupants, £30,000 is an average figure, but don't use this as a guide. Walk round the house and make two lists, adding up the total contents and the high-risk items using a calculator. If you have a very large sum insured (over £250,000) or a large number of antiques, the only way to get a true figure may be to pay for a professional valuation.

Home contents policies will cover your possessions for "new or replacement" value and you must insure using the same principal. A ten-year-old television may only be worth £20 second hand, but what would it cost to replace new?

For games, use new values where the game is still available or the current market value where it is not. For recent games then, the new price will be fine, but for games like Radiant Silver Gun and Panzer Dragoon Saga the values will be considerably more than the price when they were purchased new.

Q9. What is a "material fact" and why do I need to disclose it?

It is a fact that is material to the risk. Insurers would regard a high probability of flooding or a house made of timber to be material facts. Most insurers will request a proposal form or ask questions at the time which will automatically tell them most of the things they need to know. If, however you are aware of something that they have not asked, the policy still puts an obligation on the policyholder to tell them.

A very large games collection for example could possibly be construed as being material, because it increases the chance of a possible theft. If in doubt, tell the insurers. It is possible for companies to refuse paying a claim if they feel they have not been told about a material fact.

Q10. How much should a policy cost me?

That depends on many things. How much you insure will affect the premium, but where you live can have an equal affect. Expect to pay more if you live in the inner cities compared to the country. Household policies are rated on postcodes and insurers have access to data, which lets them know tells them where claims are higher.

Most insurers will offer instalment facilities to spread the cost for a small additional charge.

If you live in an area that suffers from floods or subsidence, you may find it more difficult obtaining cover. The insurance industry agreed with the government to continue insuring homes in flood areas until the end of 2002 to give the environment agencies a chance to improve flood defences. So far, very little has happened which may cause insurers to start refusing cover or increasing premiums.

If you are caught in this situation, ask for a quotation with an increased excess for flood, or excluding that peril altogether. Just make sure any susceptible property like games are stored upstairs, away from damaging flood waters.

Q11. When might a household contents policy not be suitable?

In some circumstances if you are living in student accommodation, you use your computers for business or you take a large amount of your possessions out of your home on regular occasions.

Q12. So what's the deal if I'm a student?

Household insurers are not keen on insuring student accommodations. In their eyes, students tend to leave gas ovens on and doors unlocked, which makes them more susceptible to claims. Thefts from student blocks are always a problem. Even if you treat your own property with great care, there is a chance that a flat mate will leave the gas on causing a claim that you were not responsible for.

There are special student policies available, but the limits for valuable items can sometimes be very low. Make sure you ask the question concerning cover for items like games and CDs before purchasing such a policy and check the wording carefully once you receive it.

A better option is to extend your parents household policy if they have one. Insurers are much more likely to give cover where it is already attached to a policy they insure. In most circumstances the cover will be the same, although often the insurers will apply an endorsement that theft claims must be subject to evidence of a forcible or violent entry. This excludes any claims from people sharing the building or from people who have borrowed a key. Picking a lock is a forced entry and would be covered.

Nearly always, insurers will insist on the room having its own lockable door.

If you are moving to student accommodation, it may be worth taking backups of your games to avoid losing the originals. NTSC-UK does not condone piracy in any form, but this is one example where back ups having a legitimate use.

Q13. What if I use my computers for business?

Most household policies will cover computers that are used for a business purpose (like a PC) up to a small limit as long as they have been advised. If however, you have a stock of computers in your home (if you are an ebay trader for example) then you will probably need a commercial insurance policy to cover it. Speak to a commercial broker to obtain a quotation, although commercial policies often start at £500.

Q14. What if I take a large amount of my computers outside the home?

Usually people in this situation will be commercial traders so a commercial policy will be required. If you happen to take your computers out a lot for leisure reasons, then a separate all risks policy may be required. Household policies can cover items out of the home, usually up to £5,000. It would be an unusual situation to require more than this.

Q15. Insurance is all well and good, but how can I protect my goods?

Prevention is always better than cure. Increasing the security on your home will help protect against burglars. All doors outside should be fitted with five lever mortice deadlocks. These can be bought from most hardware or DIY shops for around £25 each. Hinge bolts will strengthen the hinge side of the door.

Windows should be fitted with key operated window locks with the keys removed when the home is empty. Is thieves do get in, it is usually through a small gap and they then exit through the doors or windows with the possessions. If the can not open the doors or windows, then they will find it difficult to get the items out.

Q16. What about an alarm system?

Alarms are a good deterrent if fitted correctly. Most alarms are bells only, which means setting it off just creates a loud noise. This will scare off the opportunist thief, but the professional will know their way around the alarm. They are also no good in remote areas.

The alternative is to buy a central station alarm, which links to the alarm company. If the alarm is triggered, the alarm company will inform the police. Such an alarm will require annual maintenance and alarm signalling such as BT RedCARE so an ongoing cost of around £500 a year will be incurred. These can be very effective though.

Q17. Should I do anything to help if I have a claim.

Photo evidence is will hep any claim along much more smoothly if you have a serious games collection. You don't have to photo every game, nor tell the insurers of every game. Just take a photo of your games shelf or whatever you store your games in. The insurers will want to see that you have a collection, not what is exactly in the collection. Remember to store the photos outside the home at a friends or relatives or stored online. If your house were to suffer from a fire, any photo evidence would be lost if it was inside the house.

Q18. How will the insurers replace the items?

Most insurers deal with companies direct to replace items to your doorstep. However, you are not obliged to use their suppliers if the goods they are supplying are not to the same standard. Insurers may try and replace the games with PAL items instead, but do not accept them.

If an item is irreplaceable, the insurers should give the monetary value instead.

We hope that this guide has been useful to explain the insurance implications. If you have any further questions then please post a thread on our Import FAQ board.