If you live in rented accommodation, you might think that insurance is the responsibility of the owner, but that is not the case, at least when it comes to your belongings. making sure your belongings are adequately protected from damage and theft is up to you.
This is where renters insurance comes in.
Reading: Why you need renters insurance
what is renters insurance?
Renter’s insurance is simply contents insurance for someone who rents out their accommodation. protects your personal belongings from theft or damage caused by fire or flood and will help ensure you don’t end up footing the bill if disaster strikes.
Despite the financial safety net it can provide, Nationwide Building Society figures reveal that around half of UK renters do not have renters insurance. and nearly one-fifth mistakenly believe it is the owner’s responsibility to arrange content coverage.
In reality, landlords are only responsible for taking out building insurance for the property you live in, as well as insurance for furniture or other items that they include for use as part of the rental agreement.
The building cover, as its name suggests, protects the structure of the building, as well as permanent fixtures and fittings, such as fitted wardrobes, kitchens and bathrooms. the owner’s contents insurance will cover furniture and appliances such as the fridge and washing machine, if provided.
It is up to you, the renter, to purchase separate contents insurance to protect your personal belongings.
Do I need renters insurance?
There is no legal requirement to have renters insurance; It’s completely up to you whether you buy a policy.
But buying renters insurance is the only way to make sure you’re not left without money if your personal belongings are damaged or stolen. having a policy will allow you to recover the costs of replacing those items from your insurer.
what does renters insurance cover?
The type of coverage provided through a renters insurance policy will vary by insurer. but your belongings will normally be covered for damage caused by the following events:
- broken pipes and water leaks
- riots and vandalism
- theft, whenever there are signs of forced entry.
- damage caused by wear and tear
- theft or damage caused by an unforced entry, for example if you were robbed for leaving a window open or a door unlocked. if you invite people over to your house and they steal something, you won’t be able to make a successful claim
- damage caused after leaving a property vacant for more than 30 days
- theft or damage to items in excess of the single item limit*, often around £1500 (unless mentioned separately on your policy)
- theft or damage to household business belongings (you will need business insurance for these)
- possessions that are taken outside the home, such as laptops and mobile phones.
See also: How much is insurance for a 20 year old
Some policies also cover the cost of replacing spoiled food if your freezer breaks or there is a power outage, and some provide coverage for theft of cash from the property.
many policies also include renters liability insurance. this covers repair or replacement costs if you accidentally damage landlord-provided items on the property, such as furniture or appliances.
What does renters insurance exclude?
Always read your policy documents carefully to verify what will not be covered by renters insurance. common exclusions include:
* the “single item limit” is the most the policy will pay for any one of your possessions, and there may be a total amount the policy pays for those possessions. so, for example, you may only be able to claim four items in the single item limit at any given time. If you own something worth more than the single-item limit, you can list it separately on the policy, along with its value. this could make your premiums higher.
Can I elect additional renters insurance coverage?
Generally, you may pay more to add the following coverage options to your policy if they are not included as standard:
Accidental damage coverage that protects you from accidents like breaking your TV screen or spilling wine on the couch.
Personal Effects Coverage, which provides coverage for items taken outside the home, such as mobile phones, laptops and tablets. Some policies will even extend this coverage abroad, but it may be limited to only certain countries.
legal expense coveragewhich covers the cost of legal proceedings if you need to dispute a claim.
renters liability coverage could prevent you from losing your security deposit if you accidentally damage a landlord’s property.
Am I covered if I share a home with others?
This is where it can get a bit tricky. Insurers are often more reluctant to provide coverage to those who live in a shared flat or shared house, as there is a higher risk of damage or theft due to the number of different people coming in and out of the property.
As a result, many insurers will limit coverage to room only. this means that only belongings stored in your own room will be protected. Insurers generally insist that you have a lock installed on your door and your door must be locked when you are not home.
Alternatively, you can take out a joint contents insurance policy with your roommates. The downside is that if one of you makes a claim, everyone else’s premium will go up when she renews. You will also have to declare the loss of any new policy contracted during the following five years.
How much coverage do I need?
Calculating how much coverage you need isn’t easy, but it’s important to get it right.
If you overestimate, you’ll end up paying more than necessary for your policy. if you underestimate, you will be underinsured and your insurer may only pay a percentage of any claims you make.
The easiest way to estimate the value of your belongings is to go through each room in your house and make a list of all your possessions. then calculate how much they are worth in total.
Landlord-furnished items such as rugs, drapes, appliances, or furniture must be covered by your landlord’s insurance policy. but as mentioned above, having renters liability insurance will ensure you’re covered in case you accidentally damage them.
Your landlord’s insurance may also provide alternative accommodation coverage, allowing you to stay elsewhere if the property needs urgent repairs or is uninhabitable due to an unexpected and unavoidable event, such as a flood.
How can I lower the cost of renters insurance?
As with any type of insurance policy, there are several steps you can take to help lower your premiums:
Paying your policy all at once each year will be cheaper than paying in monthly installments when interest is usually added. If you can’t pay upfront, consider using a 0% credit card to spread interest-free payments over several months. however, make sure you’ve paid off the balance before your 12-month policy ends, so you don’t end up paying for two lots of insurance at the same time.
choosing a superior voluntary franchise
Excess is the amount you will have to pay toward the cost of a claim, and the higher it is, the lower your premiums will be. just make sure it’s still within your budget, otherwise the money you receive from the insurer might not be enough to replace everything you’ve lost.
consider extras carefully
When looking for additional coverage options, choose only those you think you could benefit from to keep costs down.
Talk to your landlord to see if they would be willing to install stronger locks on windows and doors or install an alarm. In addition to lowering your own insurance premiums, this could also lower your landlord’s insurance premiums.