There are many challenges that renters face, ranging from exploitative and profiteering landlords to the inflation-driven rising cost of rent across the UK. Among these challenges, the overwhelming world of renters insurance can be highly overwhelming.
Sometimes also called contents insurance, renters’ insurance provides invaluable protection for tenants. It safeguards personal belongings, provides liability coverage, and offers peace of mind.
But without proper knowledge and experience, you might unknowingly make mistakes when purchasing a policy.
In this article, we will explore three common mistakes to avoid when buying renters insurance. After reading, you will be empowered to make an informed decision when securing the coverage they need.
- Relying solely on landlord’s insurance
Some renters mistakenly believe that their landlord’s insurance will cover their personal belongings and liability. However, landlord insurance only covers the landlord’s asset – the building structure itself. It doesn’t protect the tenant’s possessions whatsoever.
If you were to not take out renters insurance thinking that landlord’s insurance gives you adequate cover, then you’d leave yourself completely at risk. Your personal belongings wouldn’t be covered in the event of unforeseen circumstances like fires, floods or robberies. You’d either have to replace them yourself or simply take the loss on the chin.
- Underestimating the value of personal belongings
When you take out a renters insurance policy, you need to make sure that you have enough to cover the value of all your belongings. Otherwise, you might find that you can only recover part of you’ve lost when you go to make a claim.
To work out how much you need, go through each room in your house and write down what each item is worth. Once you’ve done this for every room, you can find the total. It could be a good idea to get a little extra coverage just in case.
- Not understanding policy exclusions
Renters insurance policies have exclusions, which are items or circumstances that aren’t covered. It’s essential for you to know what these are, so that you don’t get any nasty surprises if you make a claim.
Exclusions on renters’ insurance typically include:
- Damage from wear and tear: This includes damage that happens due to normal usage or malfunction.
- Misplaced or lost items: If you lose belongings through carelessness or irresponsible storage, then you’ll have to replace them yourself.
- Damage caused by pets: This includes bite marks, scratches and defecation – though you could be able to purchase accidental pet damage as a policy extra.
- Incident involving unforced entry: Belongings that were stolen without a break-in aren’t usually covered.
- Damage or lost items when you’re away: You aren’t typically covered for possessions lost or damaged while you’re outside away from your rental property – but you could purchase extra coverage for this.
- Rent arrears: Renters insurance doesn’t cover your rent payments if you’re unable to afford them.
- Business-use items and equipment: If you have equipment that you use for business work at home, you need to take out business cover.
- Belongings exceeding value limits: Most renters insurance policies also have a single-item limit, which is the maximum amount the insurer will pay for any one item – typically between £1,000 and £1,500.
Navigating the world of contents insurance can seem complicated. But by avoiding these common pitfalls, you can ensure they are adequately protected and avoid costly setbacks in the future.
