If you don't already have a home and contents insurance policy, your financial well-being may be at serious risk. Home and contents insurance doesn't only protect your home and the contents within it, it protects your financial stability in the event tragedy should strike by providing some protection to one of your largest assets- your home.

So what does home and contents insurance cover? Home and contents insurance usually covers damage to your property and the contents of your property caused by fire, storm damage, burst water pipes, burglary, explosions, damage from a car, hailstorms and other potential situations that may adversely affect your home. Each home and contents insurance policy is different and will cover different circumstances, so you will want to check the terms of your policy to understand exactly what is and what is not covered.

As a rule, home and contents insurance policies will not cover damage caused by infestation, damage due to the property being vacant for an extended period of time, damage due to war and damage due to flood. Sometimes damage due to winds is also not covered, especially if the property is located in a cyclone area.

Another item that home and contents insurance may not cover is home office equipment. If you have home office equipment and it becomes lost or damaged, such equipment is usually not covered under a home and contents insurance policy. If you need your home office equipment covered, you will need to take out an additional business insurance policy to cover that equipment.

If you're wondering how much home and contents insurance will cost, you should expect to pay a minimum of $1,000 per year. The exact amount you pay will depend on how much insurance you need, the value of your home and how much coverage your policy offers. Alternatively, speak to a specialist to find the best home and contents insurance rate for your needs

While the costs of a home and contents insurance policy may be substantial, the loss you'll suffer without a policy can be financially devastating. For the monthly cost of your insurance, you are mitigating your financial risk and securing your future in the event a claim needs to be filed.