Home insurance is often a product that is not always viewed with much enthusiasm when the renewal notice comes through, especially if you have not made a claim for some considerable time, but you pay up in the knowledge that you can’t afford to take any chances and leave yourself uninsured against something going wrong.
If you are renting a property rather than being the owner, you know that the homeowner will pick up the tab for home insurance, but their policy will most likely not give you the coverage you want for your items, so should you consider buying tenant’s insurance?
If you are looking to buy or rent a property, you can view Taylor Estate Agents website amongst others, but if you are renting, here is a look at the pros and cons of renter’s insurance.
A fact of life
If you viewed insurance as a necessary evil you would not be alone, but love it or loathe it, there is no question that having some cover in place to protect you against a problem, whether it is your health or your possessions, is something most of us want.
You might argue that some insurance cover is more important than others, such as life and health insurance, leaving a product like renter’s insurance further down the pecking order, and perhaps making you wonder whether you want the expense of it at all.
Just as needing insurance cover and having to pay for it is a fact of life, having your laptop stolen or some of your property damaged, is also something that could well happen to you at some point.
What does renter’s insurance cover you for?
If you are a tenant, you will expect the landlord to have suitable property insurance in place, but the primary purpose of renter’s insurance is to provide cover in case your possessions are damaged or stolen.
A typical renter’s insurance policy will provide protection against loss or damage for the contents of your home that you own, and that cover often extends to cover some of your belongings when you are away from home as well.
It is never a good idea to assume that your landlord’s insurance provides you with cover for your possessions, so your first task when considering whether to take out renter’s insurance, is to find out what your landlord’s building insurance policy actually covers in terms of what you own in the property.
You will obviously want the peace of mind that an insurance policy can provide regarding your possessions, so that you know you are covered against financial loss, but there is another important aspect attached to having your own policy, which could prove invaluable.
As part of the cover you get with renter’s insurance, you will get liability protection.
This means that if someone is injured in the property, or maybe a dog that you own ends up biting someone, who subsequently sues you, your insurance cover should take care of the legal costs and any damage settlement, in the majority of cases.
Pros and cons
The pros and cons attached to renter’s insurance are fairly easy to identify.
The most obvious advantage of having this insurance cover, is the financial protection that you enjoy, knowing that you will be compensated for your loss if your personal items are stolen or damaged.
The clear negative about renter’s insurance is cost. Paying premiums can be viewed as wasted money, if you end up not making a claim. Add in the fact that there is often a deductible, which could potentially wipe out what you can claim, and you may decide that it is not worth having.
Having a high deductible means that some items you claim for could be worth less than the amount you can get back on the insurance payout, so you can adjust the figure, but that will mean that your premiums rise.
Putting all the relevant pros and cons together and also finding out just what sort of protection that your landlord has already paid for, will help you to decide whether renter’s insurance is a good fit for you or not.
You may well find that the sort of policy you need works out to be fairly inexpensive, but you have to work out how much your possessions are worth and whether the cost of protection is worth it to you.
As a general rule, it is likely that renter’s insurance should be worth having, especially if you bundle it together with some other policies so that you get a better deal, even if you consider it to be a necessary evil.
Jay Ashton has always worked in the real estate business in one form or another. Recently able to get into property investing after an inheritance, he has started to write articles for the up and coming landlord.