More and more over 50s are living in rented accommodation. According to research by Hamptons International, the number of homes rented by people over-50 has increased by 60% since 2012. While the number of renters in the property market is growing, many do not protect their possessions adequately. According to a 2017 BBC report, the Financial Inclusion Commission found that 60% of low-income tenants don’t have contents insurance. While the data showed younger people are more likely to skip this insurance, around 30% of renters over-65 had also failed to get insurance.
Should you get home renters insurance and if so, what does it do?
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Why should you have home renters insurance?
There is no legal requirement to have home renters insurance. However, you probably want to protect your belongings! When you are renting, the landlord’s home buildings insurance won’t cover your possessions. If something is stolen or damaged, then you can’t make a claim and buy a replacement.
What does home renters insurance cover?
Renters insurance, which is sometimes referred to as tenant insurance, covers the possessions in your rented accommodation. The insurance protects against:
- Theft
- Fire
- Burst pipes and water leaks
- Storms and flooding
- Subsidence
In addition to the basic protections, you can include additional coverage. You could have coverage for unexpected living expenses if you are temporarily forced to move out of the home. This covers instances where your home becomes inhabitable due to things like vandalism or fire, for example. You should know that your landlord is liable for covering the cost of alternative accommodation if they have failed to ensure the home is safe and habitable. For example, if you have told them about wiring issues, but they did not act on that, and there was then a fire, they would be liable for covering the cost. But if they haven't neglected their duties as a landlord, then you might have to cover the costs of your alternative accommodation. This is when additional cover might be handy. Alternative accommodation insurance can also be part of the landlord's insurance.
It’s also possible to obtain coverage for items you keep in your car or use elsewhere. Renters insurance doesn’t usually cover if your item is stolen outside of your property. Still, you can get additional cover to include this in your policy.
What is not covered by renters insurance?
The above shows you what home renters insurance covers. But it's also essential to understand things the policy won’t cover. These include:
- Valuables – things like jewellery or antiques must have additional coverage
- Wear and tear – items damaged over time through typical wear and tear are usually not covered
- Possessions outside the home – as mentioned above, you tend to need extra coverage for these
- Business contents – if you work from home, you’ll need business contents insurance to cover any equipment such as work laptops
- Unoccupied home insurance – if you are away from home for long periods, your basic insurance won’t typically cover theft or other damage to your content
It is often possible to add the above to your insurance policy with an extra cover.
What is the difference between renters insurance and contents insurance?
You might be wondering if home renters insurance is any different from contents insurance. As we’ve explained in our previous post on home insurance, there are two main types of home insurance:
- Building insurance which covers the structure and permanent fixtures of the home
- Contents insurance which covers the possessions in your home
Your landlord will take care of the building insurance since the home is their property. You’ll need cover for your possessions, which essentially means getting contents insurance.
Your landlord is in charge of certain things like fixtures and fittings that remain in the property when you vacate. For example, if the landlord provides the washing machine, then it’s their responsibility to fix it when it breaks. The exception is if you accidentally damaged it. In those situations, you may be responsible for the cost of repairing them.
That’s where home renters insurance can help. While the policy works similarly to contents insurance, it ensures your specific possessions and responsibilities as a renter are covered.
Can landlords’ contents insurance cover you?
As well as taking care of building insurance, your landlord might have contents insurance on the property they rent out. But typically, this would only cover their possessions such as things like furniture, carpets and curtains. But it won't cover items you bring in the home with you, such as laptops, clothes or your furniture. If you are renting an unfurnished property, you should get a full contents insurance policy since you'll have many more items for which you're fully responsible. If you rent a furnished property, your landlord needs to get insurance to cover the furniture they provide. However, you'll still want to cover the items you own, like laptops, books and clothing.
For example, if a pipe bursts in your home and causes water damage, your landlord will be responsible for repairing the plumbing. They will also need to pay for any damage done to kitchen units. But if the water damage caused your laptop or phone to break, your landlord’s insurance wouldn’t cover it.
Talk to your landlord to understand what type of insurance they have and what it covers. Getting a clear picture will also help you figure out what kind of cover you want for your possessions.
But as a general rule, you should always remember that your landlord’s insurance won’t cover your possessions.
What about tenants’ liability insurance?
When you start looking for home renters insurance, you may come across with tenants’ liability insurance. The policy covers you against common issues that could result in you losing your deposit.
For example, it can cover accidental damage to fittings. In most cases, it's not included in renters insurance, but you have to get a separate policy for it. Please note that tenants liability insurance doesn't cover wear and tear.
What is home renters insurance – the bottom line
What home renters insurance does is provide you with protection. You probably have possessions that are meaningful and important. While insurance can’t cover the emotional impact of losing your things, it will help with the financial side of recovering from accidents or theft. You shouldn’t assume your landlord’s insurance would cover your things. While you don’t have to worry about insuring the building when you rent, you still need to look after your possessions.
If you are renting or thinking about doing so, make sure to get appropriate home renters insurance. You should compare different options and include any additional coverage you feel you need.
