Tenants' Insurance Policies

Is it Necessary to be Insured When Renting an Apartment or Home?

Jul 29, 2009

Tenants Insurance will Cover Losses, baderavephotos

Tenant policies are similar to homeowners' insurance policies. Is this type of insurance an unnecessary luxury or is it essential and what does a tenant's policy cover?

Tenant policies are similar to homeowners insurance, except that they do not cover the structure of the building. They do, however, cover changes made to the inside structure, such as carpeting, kitchen appliances, and built-in bookshelves. If a tenant is renting an unfurnished property then tenant's contents insurance is essential to protect personal possessions against insured risks such as flood, fire or theft.

Many tenants mistakenly believe that their landlord's insurance will provide sufficient cover for their needs- it won't. In reality a landlord's insurance policy will normally only cover the building itself and its permanent fixtures and fittings.

Tenant's insurance can give valuable peace of mind. Even if a tenant is renting a partly or fully-furnished property and the landlord has additional cover in place for the contents in it, the policy is unlikely to cover personal belongings- for example jewelery, cameras, bicycles, electronic gadgets, sports equipment, laptops, games consoles, musical instruments and clothing.

How Tenants can Reduce the Cost of Insurance

Security: Speak to the landlord if good security measures are not in place. Good quality locks for doors and windows can reduce premiums and give the tenant peace of mind. Some insurers won’t provide cover unless there are specific locks, such as deadlocks are fitted. Other insurance companies will reduce premiums if additional locks are fitted, such as bolts and extra security locks. A burglar alarm will reduce premiums even more, especially in areas with high crime statistics.

Shop Around: As with all insurance, get a few quotes before choosing which policy to go for. Getting contents insurance for a shared house or flat is notoriously difficult and many insurance companies simply won't quote for it.

The majority of insurance companies will only provide cover for theft when there is evidence of forced entry, so there is no comeback against thieving flat mates. Whether buying a policy for the first time, or renewing an existing one, get a quote from at least three insurers. Don’t be afraid to ask insurers if they’ll price-match.

Increase Excess: An excess on a policy is the amount a tenant will pay in when claiming. A tenant can lower premiums by increasing the amount of excess he or she would pay when claiming.

Build up a ‘no claims' record: Companies will often give a discount on premiums if there have been no claims made over a certain time period.

Different Types of Tenant's Insurance

Contents coverage: This covers items that are lost or damaged that need to be replaced.

Liability coverage: Offers financial backup if something is damaged by the tenant or his guests. Reimbursements can also be received if a person gets injured at home, holds the tenant responsible and files for damages.

Special coverage: This is an option 'special items', such as cash, LCD TV, jewelry, computers, bicycles, sporting equipment or family heirlooms. This coverage would add to premium costs.

In summary, the things to consider when purchasing tenant's insurance are: replacing contents, protection against liability claims, expensive items that need special coverage, a roommate who is not a relative and the presence of a home-based business.

Source:

The Need for Tenants Insurance, Insurance Article Sphere, Rudi O'Neil, January 2009