With the continuous climb of house prices ensuring that the act of purchasing one has become increasingly more difficult, the number of those renting has soared. The flexibility that comes with renting is typically what draws young professionals to this area of the property market, allowing them to move around with relative freewill without being tied down to the long-term payments of a mortgage.
Yet whether you own your home or not, it is essential that your home contents are adequately protected in the unfortunate event of permanent or accidental damage, or even theft. The fact that a tenant doesn’t own their home has various consequences on what is and isn’t covered in terms of home insurance. In this article, we will explore what home insurance policies a renting tenant should take out to ensure they are protected in the variety of circumstances they may find themselves in.
What type of home insurance should a renting tenant take out?
As you may know, there are two primary types of home insurance: buildings insurance – which covers the structure of the property itself, and contents insurance – which covers all of your belongings inside your home.
A landlord must take out a special type of buildings insurance that makes sure that the building they are renting out to tenants is adequately covered in the event of any damage. Because landlords are required to take out this type of policy, tenants will only need some form of contents insurance. When you become a homeowner, you will require both types of insurance to ensure your belongings and your home are covered – with buildings insurance a prerequisite for receiving your mortgage.
For tenants however, contents insurance isn’t a legal requirement. With that said, some landlords require tenants to take out adequate contents insurance cover before renting their property. It is also a sensible step to take out a policy which protects your contents from any damage or theft.
Specialist tenants’ insurance
The contents insurance that you take out as a renting tenant is essentially the same policy that a homeowner would take out. There are however certain policies which are tailored directly towards the renting market, known as tenants’ insurance. These are forms of contents insurance that work in the same way: your belongings are covered from any damage caused by fire or flooding and are also covered in the event they are stolen.
When taking out contents insurance, you are required to tell the insurer the total value of your belongings. A general mistake that many tenants make is that they undervalue their belongings and submit a number that would not cover their replacement if their possessions were damaged or destroyed. This is also known as under-insuring, and if you make a claim, your insurer will only pay out up to the amount you initially submitted when taking out the policy. It is essential that you go from room to room in the property, adding up the amount it would cost to purchase each of the items as new, to ensure you are adequately covered.
What if you’re renting a room?
Not all renting tenants take residence in a flat or house. There are many unique situations in which tenants rent and you need to be careful to ensure that your contents insurance policy is still valid.
One of the most common cases in this example is renting a room. If you happen to be renting a room in a house share, whether you are an individual or a couple, you need to check the small print of your policy before you take it out. Simply put, if you are sharing a property with non-family members, it is seen that there is an increased chance of your belongings being stolen, damaged or lost. This is based on the idea of the increased number of people who will be passing through the property at any one time. Typically insurers may not provide cover if you are just renting a room, however, there are specialists for this type of insurance.
If you are renting a flat with a group of friends for example, you could either insure individual rooms, or you could take out a policy for the property as a whole. The more people living in the flat, the more belongings you will typically have to cover, and the higher your insurance premium could be.
This example is particularly relevant to students. It is very important in a student setting, that you are sure about who you want to live with before you take out contents insurance. For example, your policy may become invalid if you haven’t informed your insurer that a house member has moved out. Again, there are specialist students’ contents insurance providers because students tend to own high-value items such as books and laptops, but with this speciality comes a relative increase in price. Some students may already be covered by their family’s home insurance policy. This is due to the fact that they are seen to have only ‘temporarily’ left the home, and are therefore covered when in student accommodation.
Important added extras to contents insurance
As a tenant, you have to bear in mind that the property, and usually some of the furniture and white goods, are not yours. This means that any damage caused to the building itself will be covered by the landlord’s buildings insurance policy. It is the landlord’s responsibility to insure any furnishings in a partly furnished property.
Accidental damage is the primary cover which, as the name suggests, protects your belongings in the event of an accident. This will come in handy, particularly to protect accidental damage to furniture.
Tenant liability is another add on which is particularly valuable as a tenant, so much so that some landlords request it before letting out their property. It will protect you in the event of any accidental damage caused to any fixtures or fittings or furniture owned by the landlord whilst you remain a tenant in the property.
Another addition to consider is personal possession cover. This will ensure that your belongings are covered outside of the home – an important consideration if you value the protection of your mobile phone, tablet or computer, for example.
The most important part of taking out a contents insurance policy as a tenant is being honest with your insurer. This includes providing correct details about who is living in the property and the value of your personal items.
If you are looking to get the best price for your insurance premium, the best advice we can give is to shop around. The Be Wiser website is a fantastic place to start in finding a competitive premium price.