More people than ever before are renting property since getting on the property ladder is difficult and expensive, especially in cities. Whether you’re renting your first ever home or whether you are simply relocating to a different property, making sure that you get the right insurance to suit your needs is essential. While some tenants believe that they don’t need to arrange an insurance policy since they don’t own their own home, this is certainly not the case. While cover for the building itself is not necessary, since this is the landlord’s responsibility, cover for contents and personal items is essential in case of theft or damage. That’s where renter’s insurance comes in.
Renter’s Insurance: What You Need to Know
Is Insurance A Legal Necessity?
Although renters are not legally obliged to take out renter’s insurance, it is certainly a sensible idea to protect your property, especially if you own expensive items such as a laptop, HD television or desktop PC. This ensures that, should you fall victim to theft, fire or flood, you will be compensated for your losses. Even if you think that you don’t really have anything that is worth insuring, when you look at the value of all of your clothing, CDs, gadgets and books you’ll probably find that, in fact, your property is worth a lot more than you imagined and replacing everything could set you back a lot of money. When taking all of this into consideration, investing in renter’s insurance is an essential expense.
Adding Up The Totals
Once you’ve decided that investing in renter’s insurance is the right course of action, it’s best to take a thorough approach to calculating the value of all your items. Guessing an amount is not a good idea as you may well underestimate the value. Go room by room through your home, adding the value of every item if it needed replacing from new. Remember to include everything, not just expensive pieces like the sofa or TV, and be as accurate as possible. Remember that over-estimating will result in a higher premium, but under-estimating will leave you with adequate cover.
Taking Valuable Into Account
Most renter’s insurances policies have a limit that can be claimed for a single item. Therefore, if you have any item which exceeds this amount, for example a diamond ring or an expensive musical instrument, you will need to make sure this is declared separately from the other contents items to make sure there is sufficient coverage to replace it in the event of loss.
Do You Need Coverage Outside Your Home?
Not all renter’s insurance policies cover you for use outside your home, however many of your items such as your cell phone, your jewelry and your laptop are often taken out of the property. You can often add additional cover for your items in case of theft or damage when outside the home, and although you’ll need to pay extra for this cover it can be well worth it.
Most renter’s insurance policies will cover you for damage which you haven’t caused, such as flood, fire or theft, however they often preclude accidental damage or breakage. If you want to add accidental damage to your policy cover, this is often possible and, although it will cost you more, it could be useful if you have any especially fragile or delicate items that would be costly to replace if dropped or broken.
You may be renting a home that is partially furnished or fully furnished already by the landlord. Carpets, wardrobes, refrigerators and washing machines are often included within the rental cost and, while any standard faults are the responsibility of the landlord, any if any damage occurs to these items that the landlord believes you are responsible for, you will almost certainly have to pay for the costs of rectifying the damage, or have the amount taken from your deposit.
This means that even a small carpet stain could result in you having to pay up for the whole room to be re-carpeted. You can often add on extra cover to protect you from this eventuality, ensuring that the landlord’s items are also covered in the event of accidental damage. Again, while this will increase your premium, it could help you to avoid losing some or all of your security deposit.
What Else Do You Need To Remember?
Although it is clear that having renter’s insurance is very important for most tenants in order to protect against the cost of replacing contents and personal items which are stolen or damaged, it is also important to remember that, should you make a claim, your next year’s premium will be exponentially increased. It is therefore important to avoid claiming for small losses which could easily be paid for personally, since the increase to the premium will usually be more than the item was worth.