If you’re one of the millions of people who rent their home or apartment as opposed to owning it outright, you may not be aware that you still should have home insurance on it. Although you may think that the landlord you rent from automatically covers you, this is not the case.
The only insurance that the landlord needs to provide by law is buildings insurance – anything inside the property is your responsibility (with the exception of any appliances that may be included in the rent). Therefore, you need to make sure that you’re adequately covered should something go wrong, and home insurance for rented property, also known as renter’s insurance, is what you should be looking at.
What Does Home Insurance For Rented Property Involve?
Although home insurance for rented property is very similar to full home insurance on owned houses, there are a few distinct differences, so it’s worth knowing what is and isn’t covered. The three main areas that rented home insurance covers are:
• Personal property. This will ensure that should any of your possessions be damaged by fire, theft, vandalism or storms, they’ll be replaced for you.
• Loss-of-use cover. If you need to live somewhere else while any repairs are being made to the property you rent, this pays for any hotel costs and expenses such as meals.
• Personal liability. If you visit a friend, or someone you know, and for whatever reason you cause damage to their property, this will make sure you’re not stuck with any repair bills, or medical costs should you be responsible for any injuries you cause.
Although you may feel the last one is slightly over-reacting, and that none of your friends would ever sue you because of an accident, you can be sure this is likely to change if they’re out of work for a prolonged period of time, and struggling to pay their bills and other living costs.
The Exceptions
Where home insurance on rented property differs from normal home insurance is when it comes to earthquake or flood damage, although you can actually buy additional cover for these. The same goes for some of the more costly items in your home, such as jewellery and computer hardware.
How Much Should I Insure For?
According to figures released by the insurance ombudsman, almost 40% of people are under-insured when it comes to home insurance, and this is even higher on rented properties. Therefore, to make sure you’re covered properly, take an inventory of all the items in your home.
Make a list of how much it would cost to replace these items, and then take out the relevant insurance cover. It doesn’t cost that much, either, with $30,000 worth of home insurance cover costing as little as $16 per month. This includes up to $300,000 worth of liability cover, so you can see why it’s worth the little extra on your outgoings to have home insurance.