Rising house prices and falling wages mean that the level of home ownership in the UK has dropped to a 25-year low, and the number of people renting privately or living in social housing has soared.
While renters have little responsibility for the actual bricks and mortar they’re living in, they do still have a strong interest in protecting their possessions.
Tenants protect their possessions, not the building
It’s the landlord’s choice whether they provide insurance for a building’s structure or not, including fitted bathrooms and kitchens, as well as the items they own within the property they rent out, such as any beds, sofas, cookers, washing machines, wardrobes and other items included in the rental agreement.
However, those who rent nearly always have to provide cover for their own possessions, and tenants insurance provides the financial protection they need.
Who is tenants insurance for?
Tenants insurance is essentially the same as what’s known as contents insurance, which can be bought on its own or alongside buildings insurance as part of one combined home insurance policy.
As some tenants might live in shared accommodation, such as a shared house or flat there may be some adjustment needed to the more standard-type of contents insurance, but very little.
Bear in mind that some insurers won’t offer cover to those who live in shared accommodation with non-family members, or there may be additional exclusions to a standard contents policy, such as if bedrooms don’t have locks, for example.
Students often live in shared accommodation, but most insurers offer separate types of contents insurance policies for students and standard tenants, or contents, cover isn’t usually suitable for them.
What does tenants insurance protect?
As a tenant you might rent your home fully furnished, part furnished, or completely unfurnished. If your landlord provides some furniture and fittings such as white goods it’s usually their responsibility to insure them, if they so wish.
But whatever the type of lease you sign, contents cover protects the things you own within your rented home. Essentially, these are the items you would take with you if you moved.
A standard policy would ordinarily include any larger items you’ve accumulated such as sofas, dining tables, wardrobes, washing machines, fridges and dishwashers, as well as personal items such as computers, televisions, stereos and other electrical items, as well as bicycles, jewellery, clothing, antiques and musical instruments.
How much cover do you need?
It’s easy to underestimate how much it would cost to replace all the things you own.
It’s best to make an inventory, remembering to note the brand new replacement cost of items, and not their second hand value (nearly all policies offer ‘new for old’ cover).
Remember to include big ticket items, such as any white goods and wardrobes, as well as rugs, curtains and other fittings you might own.
Don’t be confused when comparing quotes
When you’re gathering quotes for your tenants insurance, you’ll notice that you’re directed towards what’s generically known as ‘home insurance’.
Home insurance consists of two main elements, buildings insurance and contents insurance. Buildings insurance is there to cover the main structure of the building, so it’s the landlord’s choice whether to provide it or not and you don’t have to worry about it.
Contents insurance is the same as tenants insurance as it’s there to financially protect the things you own against loss or damage by such events as fire, theft, flooding, storm damage and burst pipes.
What to check
Claim limits – Claim limits are the maximum sums you can claim both for single items and in total on a policy. Make sure these reflect the value of the things you own.
Specifying items – Items which exceed claim limits, or are very fragile or highly attractive to thieves, might need specifying to the insurer or, in particular if they are extremely valuable, insuring with separate specialist cover.
Excess – The policy excess is the first part of any claim that you have to pay before the insurer covers the rest. To an extent, you can choose what this is; the higher the excess you choose to pay, the lower the premiums in most instances.
Extras you might want to add to your policy
Cover for damage and loss to your possessions comes as standard with nearly all contents insurance policies, but there are other cover options available which you may want to consider adding.
You might want cover for you possessions when you’re away from your property or when you accidentally damage something, for example.
Here are a number of common extras which could prove useful to have:
- Away from home cover
- Accidental damage cover
- Legal insurance
- Key and lock cover
- Extra cover for specific, highly valuable items