Ask Melanie | Ask Melanie: Home contents insurance

If you cannot afford to repair or replace something when it is stolen or damaged, and you prefer not to live without replaceable items, it's worth having home contents insurance. Benefits received as the result of a successful claim will help stem loss.

Make sure your cover remains current - mine lapsed and wasn't noticed until moving apartments earlier this year. Stern self-rebuke was followed by not particularly swift action, but I eventually arranged new cover.

While on the surface the policy looked good relative to my possessions and lifestyle, and the premium was reasonable, a recent burglary and the loss of much-loved and long-collected watches and jewellery exposed my cover.

Here's the low-down on home contents insurance.

Local policies typically cover damage or loss to items from fire, typhoon, gas explosion, flood, theft and accident. There are dollar limits per item. Cash, jewellery, collectibles, electronic equipment and furniture have varying item caps. Matching these against your possessions is straightforward. If the caps don't match your valuables, consider specific item cover. There are also dollar caps per event. Predicting total loss from a single event is difficult. Actuaries use floor area as a guide to total home contents and base the event cap on that. A room-by-room inventory of all possessions and their value will indicate whether your tastes match the average. You may need to review and upgrade your cover as new acquisitions are made.