Just because your landlord has cover does not mean that you do too. In most cases, your landlord’s insurance policy will only cover structural damage to the building itself. If your flat were to go up in flames, your landlord’s policy would not reimburse you for your own lost possessions.
Tenants’ insurance protects your possessions in case of a loss from fire, smoke, lightning, vandalism, theft and other hazards. It also extends beyond theft or other hazards that occur in your unit—covering property that is either stolen or lost from your car or damaged anywhere you happen to be.
There are two personal property cover options to choose from: new for old cover or indemnity (wear and tear) cover. Here is an example to illustrate the difference:
The furniture you bought several years ago for £650 might only be worth £100 today, but it would cost £900 to replace. With an indemnity policy, you would be reimbursed for the current depreciated value of the item. However, if you have new for old cover for your personal property, you would collect the full cost to replace the furniture. New for old cover ensures that you can replace yesterday’s purchases at today’s prices.
Calculating the value of your belongings can be difficult, but these two tips can help:
- Create extensive records of your possessions – Experts recommend that you take close-up and wide-angle pictures of individual belongings. Then make an item-by-item list so that you can quickly skim to see what items are documented. Some people find it easier to keep their lists of belongings grouped according to the rooms where they are located, while others group their belongings by item type such as jewellery, artwork, books and furniture. However you decide to record your possessions, it is a good idea to store the information in at least two different places. Consider keeping a hard copy of all of your lists and photos in your office at work and also saving them in a folder on your computer.
- Do your research – Even though your kitchen table may have cost you £500 when you first bought it, a comparable new one could cost you double that amount, so that is the amount of cover you want. Check out websites and local furniture stores to research comparable prices.
In addition to protecting your personal property, tenants’ insurance also protects you in the event that you are responsible for injury or property damage to others. That means you will likely be protected if a guest to your flat slips and sprains his or her ankle.
Liability can also provide cover for your legal expenses whether an incident occurred within your rented residence or elsewhere.
Make sure to set aside some time each year to review your policy and ensure that your sum insured and cover are still applicable. Evaluate your needs based on the value of your belongings, the money you have in savings and the amount of risk you feel comfortable taking. Then, make sure to read the entire policy—especially the exclusions—to guarantee that you are covered in every situation that is necessary for your lifestyle. If you have questions about your tenants’ insurance policy, please contact BC Underwriting today on 01444 810444.