Renters Insurance: What Do You Need to Consider?
If you are renting, you may think you don’t need to consider insurance as it will be covered by your landlord's insurance, but this is not always the case and some items may not be covered. Read on to learn what renters insurance is, how it works and what it covers.
One of the big advantages of renting is that you don’t have to take all the responsibility for maintaining your home.
But while repairs, improvements, and replacing fixtures and fittings can usually be left to the landlord, not everything can be.
When it comes to your possessions – including any furniture you buy – the responsibility for insuring them lies firmly with you, the tenant. That’s why it is worth considering renters insurance.
What is renters insurance?
Also known as tenants insurance, renters insurance helps cover the cost of repairing or replacing your belongings if they are stolen or damaged.
While landlords are responsible for the building, permanent fixtures and fittings, as well as the various appliances they have provided – such as white goods – they are not responsible if anything happens to their tenants’ belongings.
This means they don’t have to replace any personal possessions you have lost or had damaged in the event of a fire, flood or burglary.
Do you need renters insurance?
It is not a legal requirement. But whether you are renting a single room, a flat or a whole building, you may want renters insurance to protect against loss of possessions or damage to them.
Some landlords will already have a contents insurance policy in place for anything that belongs to them. However, this will only cover items in the property that they own, not your belongings. Additionally, if the property you rent was unfurnished, the landlord may not have any content insurance at all.
If your landlord has accidental damage cover you may be covered in the event that you unintentionally damage their property. But if they don’t have this, they may ask you to cover the cost of any repairs yourself, or they may deduct the cost from your deposit.
To help with this sort of issue, you may want to consider taking a combined tenants’ liability and content insurance product. Tenants’ liability cover is designed to cover accidental damage to a landlord’s fixtures and fittings.
How renters insurance works
While the landlord is responsible for the building and permanent fixtures and fittings, renters insurance covers the tenant’s possessions.
This cover includes damage or loss due to vandalism, theft, explosion, fires, storms, escape of water and the effects of subsidence.
In many ways, it is similar to conventional contents insurance. The main differences include the limit on the value of the possessions covered and the level of liability covered.
What renters insurance covers
As with a standard contents insurance policy, renters insurance will usually cover loss or damage to personal possessions, such as electrical goods, any furniture that’s yours, clothes and jewellery.
Most policies will also allow you to claim for replacement locks and lost or stolen keys, as well as items you may not consider, such as bedding and crockery.
Some will also include tenants liability cover, which pays towards fixing accidental damage to your landlord’s fixtures and fittings or belongings.
What renters insurance doesn’t cover
As with all types of insurance, these policies tend to come with a few exclusions, so it is important to read the small print.
Standard cover usually excludes:
- damage to items due to wear and tear
- possessions worth more than the single-item value limit, typically up to £1,500, if the item wasn't listed separately
- unforced entry, where possessions are stolen in a burglary but there is no sign of a break-in
- loss of items you are using for business purposes
- items damaged or lost when away from the property
Renters contents insurance extras
Some of the exclusions from most renters insurance policies are available as optional extras. One of the most commonly added is personal possessions cover, which protects against loss or damage when items such as smartphones and laptops are taken when you are outside the home.
You can also list items worth more than the single-item limit, such as jewellery, separately. This may cost extra, but it is important to tell your insurer so these are included in your cover.
If your policy doesn’t include accidental damage cover, you may consider adding that too. That way, if you drop your laptop, for example, you should be covered.
Do you need student contents insurance?
With student rooms and flats likely to contain high-value items, such as laptops and smartphones, some form of contents insurance is worth considering. One option for students is to be added under their parents’ existing home insurance cover, if their policy allows it.
Otherwise, conventional renters insurance can be useful, and a number of insurers offer students contents policies.
On the other hand, some insurers steer clear of students as they are considered higher risk than other tenants, so the choice can be limited and the premiums may be higher.
» MORE: What is contents insurance?
How much cover do you need?
The easiest approach to working out how much cover you need is to take an inventory of your possessions and make a note of their value.
You can provide an estimated value of all your possessions, but anything around the single-item limit, which is typically £1,500, will need to be specified. If you buy something expensive after you have taken out a policy, tell your insurer or it may not be covered.
It is important to be as accurate as possible, and you should keep receipts of any expensive items you want covered. If your estimate is too low, the payout you get from a successful claim may not give you enough to replace the lost or damaged items. If it is too high, you will be paying more for your insurance than you need to.
» COMPARE: Compare different types of home insurance
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Jeff is a freelance journalist who writes across finance & business. He was the personal finance editor at The Scotsman & Scotland on Sunday & a member of the Financial Services Consumer Panel. Read more