It definitely pays to take out renters’ insurance to cover the cost of replacing your possessions should they be damaged or stolen. Even though you rent your home and you are not responsible for insuring the structure of the property (this is the responsibly of your landlord) you are responsible for safeguarding your own items such as furniture, audio equipment, clothing etc.; basically, anything that you would take with you should you move out.
Although renters’ insurance is not required by law, for just a few pounds a month it provides invaluable peace of mind that if the worst happens you will not be financially out of pocket. However, before you sign up for a policy it pays to read the terms and conditions of your policy first as there are some things that renters’ insurance simply does not cover.
Many renters’ insurance policies do not cover damage incurred to your possessions due to natural disasters. If you live in an area prone to flooding, earthquakes, sinkholes, or wildfires, for example, then you may have to purchase a separate policy that provides cover against these possibilities.
If you need to make a claim and don’t have any documents to confirm the value of your items you may find that your insurer refuses to pay out. It pays to keep the receipts for all large purchases and to keep them safe; modern technology means that we can now scan these types of documents and store them in a ‘cloud’. In addition, take photographs of your valuable items, and list all your electronics including both the model and serial numbers.
If you do own some high value items, such as jewellery or artwork, then you will need to insure these separately as most insurers specify a top limit with regard to the value of items covered by the policy. If you are unsure of the item’s value then have it professionally appraised.
Not all renters’ insurance policies include liability cover. If you were to have friends around to your home and one of them sustained an injury they could make a claim against you. Without liability cover you could end of owing thousands of pounds in compensation and legal fees, so add this type of cover to your policy if you are at all concerned.
If you live with family members their possessions will also be covered as long as their name is included on the insurance policy. However, if you share your home with a roommate who is not related to you they should purchase their own policy if they wish to cover their possessions.
Pet owners may find that some insurers will not cover them if they have certain types of dogs, or if they do they may ask for an additional premium.
A basic renter’s insurance policy covers your possessions against damage and theft although you may find that some eventualities are not included. These exclusions are damage caused by the breaking or freezing of water pipes, damage due to riots or civil unrest, and damage incurred due to falling objects. Check the small print of your policy carefully and up your coverage to include these events if you think that it is necessary.
The most accurate method of deciding how much cover you need is to go around every room in your home and list all the items of value along with their original purchase price. You may discover that your belongings are worth more than you anticipated. Some insurers will offer to pay the replacement cost of your items; basically, what it would cost today to replace items that are stolen or damaged. Others offer cash value only which is the current worth of your items and depends on their age and condition. Replacement cost policies may be slightly more expensive, but are definitely worth the extra expense in the longer term.
Although there are some things that renter’s insurance does not cover the advantages of taking out a policy far outweigh the disadvantages. In addition to covering your possessions in the event that they are stolen or damaged many policies will also pay out if you need to live in temporary accommodation should your home become uninhabitable. In addition, many policies will also cover possessions that you take with you outside of the home, for example, mobile phones and laptops.
When taking out a renters’ insurance policy it pays to shop around. Online comparison sites are a great way of searching for the best deals, although remember to compare quotes on a like for like basis. You will also need to decide how much voluntary excess you are prepared to pay on the policy; this is the amount of money that you pay out of your own pocket should you need to make a claim. The higher the excess, the lower the premium, but always set this excess to a price that you can realistically afford.
For a relatively small cost renters’ insurance give you peace of mind that if your possessions are stolen or damaged you will be financially compensated. Just take time to read the terms and conditions of your policy now to avoid disappointment later on.