Mon 16 Mar 2020
Paul Bennett, Director
Home related insurance is not the most thrilling topic but learning about the protection offered by these policies is far less painful than losing all your worldly goods or not having your deposit returned.
One of the biggest grey areas concerns tenants and the level of insurance cover they automatically think their landlord supplies. Many renters believe a common myth - that a landlord has everything insured, so they don't need to take out any policies at all.
This isn't true and many tenants only discover this after an unfortunate incident. While a landlord will usually have taken out buildings insurance, the tenant also needs to put protection in place. There are two main policies a tenant should consider, plus an emerging third policy that's not applicable to everyone.
Tenants’ contents insurance
It is highly unlikely that a landlord’s buildings insurance policy will cover personal possessions owned by a tenant. Insuring belongings such as furniture, gadgets, jewellery and decorative accessories is the responsibility of the tenant.
A tenants’ contents policy will give varying degrees of cover and can be tailored to an individual’s exact requirements. It is possible to add optional extras including extended accidental damage cover, bicycle cover, possessions outside the home and high-value single-item cover.
Tenants’ liability insurance
Accidents in a rented property do happen and tenants’ liability insurance provides tenant cover if they unintentionally damage the furniture, fixtures and fittings owned and supplied by the landlord - kitchen cabinets and windows, for instance.
In addition, this policy usually protects possessions against theft and damage due to fire, floods, storms, subsidence, burst pipes and water leaks. Not all contents policies are the same, however, so it is worth checking whether the policy provides cover for incidents such as red wine spilt on a landlord’s carpet.
Tenants’ liability insurance is really important for renters who have paid a cash deposit, as damage to a landlord’s property and/or possessions can prevent a deposit from being returned. It's also advisable that tenants renting a furnished property take out this type of cover as replacing items such as white goods and bathroom suites can be prohibitively expensive.
Tenants’ liability insurance can be taken out as a stand-alone product but it's very common for it to be sold together with tenants’ contents insurance.
A rise in deposit-free renting has led to a new insurance product that replaces the need for a substantial cash deposit at the start of each tenancy. Instead of paying the equivalent of up to 5 weeks’ worth of rent, tenants can take out a one-off insurance policy via a deposit replacement company - usually equating to one weeks’ worth of rent.
This type of insurance policy can't be bought on the open market and is only offered via is some letting agents on qualifying properties. The renter is still liable to pay for any damage to the property and/or unpaid rent at the end of the tenancy.
If you are a renter and would like to know more about protecting a property and your possessions during a tenancy, please contact Behr & Butchoff for advice.