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Why you need to take out tenants contents insurance

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Disclaimer

Note that although this article is a general article, we are an introducer for Alan Boswell Insurance Group (and will get a modest commission if you sign up to their insurance after following one of our links). This commission income will help support the Renters Guide website.  Nothing below constitutes personal advice on insurance. It is simply intended to be generic guidance.

Alan Boswell are reputable insurance brokers who specialise in business and property insurance, and one of their products is a tenant insurance product.  To find out more about it:

1. Introduction

You do not HAVE to take out insurance if you are a tenant.  So tenants, who are often hard up, often don’t take out insurance as an economy measure.

‘After all’ you might say, ‘the landlord will have insurance so why should I bother?’

However, although the landlord will almost certainly have insurance, this will only be in respect of the building and his own fixtures and fittings.  His insurance will not protect YOUR possessions or YOUR losses.  

This is why it is really important that you arrange for your own insurance cover.  After all, say there is a fire at your property, it becomes uninhabitable and you lose all your possessions.  Your landlord or the council will probably be able to arrange for you to have somewhere else to live (at least temporarily) – but you will have the expense of replacing all your things. 

Its only when disaster strikes that you find out how important insurance cover is – and how important it is to use a decent insurance company.  

2. About tenants insurance cover

Here is a quick rundown on what can or cannot be included in a tenant’s insurance policy.

Your possessions

These will be things like your clothes, furniture, electrical goods and jewellery.

Some things may be optional (meaning that you may have to pay a bit extra for cover).  This includes things like expensive electrical goods such as computers particularly if they are portable such as laptops.

You will also normally need to get extra cover for bicycles although they may be covered if they are stolen from your home (if so check the maximum value, particularly if you have an expensive bike).  However, a normal policy is unlikely to include cover for bicycles away from your home.  So you may need this.

You will normally also need to get extra cover for cash and credit card loss.

Tenants liability cover

This is useful.  It will cover you for accidental damage to the property and your landlord’s fixtures and fittings – meaning that if you damage something it will save you from losing your deposit.

It is often included in tenants policies but check to make sure!

Alternative accommodation

If the worst happens and your rented property is rendered uninhabitable in some way, most tenants’ insurance policies will include alternative accommodation cover so that you will have somewhere to live while you sort things out.  But again, check that this is included.

So far as the Alan Boswell Group tenants insurance policy is concerned, we asked them what their cover for alternative accommodation under a tenants policy would be and they told us:

Loss of Rent receivable or the reasonable cost of comparable alternative accommodation for the period that the buildings, are uninhabitable as a consequence of damage due to an Insured Event. This extension is subject to a maximum limit of 20% of the sum insured on contents as shown in your Schedule.

So this means:

  • The alternative accommodation must be ‘comparable’ – so if you lived in a cheap room in an HMO you will not be able to book a room at the Ritz  
  • The buildings must be uninhabitable because of an ‘insured event’, ie something the policy would cover.  When getting a quote, you should ask the insurers to let you know what the insured events are (and what they are not)
  • The amount you can claim is linked to your sum insured.  So if you have insured your possessions etc to the value of £8,000, the most you would get for your alternative accommodation claim would be £1,600.

These comments just relate to the Alan Boswell Group insurance.  Other insurers may deal with things differently.  But ask them!

Pet damage

Landlords often refuse to allow pets because they can be so destructive.  Even the best-trained dog, for example, can sometimes cause expensive damage.

However, this is something that you can insure against and cover can be included in tenant’s insurance policies.

You will need to ask for this though, as not all tenants require it.

What will not be covered in a tenants insurance policy

  • Things that are your landlord’s responsibility – such as the building and his fixtures and fittings.
  • Damage caused by ‘fair wear and tear
  • Damage or loss that occurs when the property has been unoccupied for a period of time (the time period will depend on your policy but will probably be 30 days)
  • Damage caused by your fault or negligence – for example, if you go out leaving the doors and windows open or if your doors and windows don’t have proper security locks
  • Theft of home business belongings
  • Your rent arrears (but your landlord can insure against this – its called ‘rent guarantee insurance’)

3. Things to check before buying insurance

What cover do you need for your things?

You need to make sure that you take out enough insurance for your possessions.  So make a list of everything that you own and put a price next to each item.  

Ideally, keep this on the internet (maybe in a Google document or dropbox) so you will have access to it after, for example, a fire or burglary.  So it will make things easier if you have to make a claim.

Make sure you keep it up to date when you buy new things.

To help you, Alan Boswell Group has a contents calculator you can use here.

You should also check to see if the policy includes alternative accommodation cover and if so what exactly you will get.

Do you need any extra cover?

For example, do you have any particularly expensive items (such as computer equipment)?  Or a bicycle?

If you have a pet, remember to ask your insurance broker about cover for pet damage.

What is the security like at your property?

Your insurers will expect your property to have good locks on all the external doors and windows.  If you rent a room in a shared house, your room will need to have a decent lock on it.

Make a note of the locks at your property.  If they are clearly inadequate, ask your landlord if they can be replaced.  A good landlord will normally agree to this – it will also benefit his own insurance.

4.Getting and comparing quotes

The first thing to say here is that you need to be totally honest and upfront with your insurers.  If they find out that you have been lying to them, this will be a reason for them to refuse a claim.

So always be absolutely truthful.  

Getting a quotation

There are a number of websites where you can get instant quotes online.  However, sometimes it may be best to contact a reputable broker and discuss with them the cover you need.  They will be able to advise you properly.

For example, if you want to get a quote from Alan Boswell Group you can either get a quote online or ring up and speak to an adviser.

These are some of the things you need to check – which may be easier if you are speaking to an adviser:

Are there any exclusions?  For example if your property is in an area at risk of flooding, will this affect your claim?  Note also that if you have made claims before this may affect the premium you pay.

What are the fees?  Sometimes these are charged for things like

  • Changing your method of payment
  • The sum insured increasing for some reason
  • Having an amendment to your policy (for whatever reason)

You should also ask whether it will be cheaper to pay annually (and if so by how much).

Is there an excess?  This is where you pay the first part of any claim.  So if you are claiming for a laptop value £700 and the excess is £250 you would actually get a payment of £450.  So you need to know what the excess is. 

Sometimes there are different excess sums for different types of claims.  Find out what these are, if any.

NB Alan Boswell Group tell us that their normal excess is £75.00.

Take notes

If you are getting a quotation from more than one insurer, make a note of all these things so you can compare the quotes you get before you commit yourself.

5. How much will it cost?

This will vary from insurer to insurer.  But be careful about choosing the cheapest quote – you may find that they actually make up the difference in ‘hidden fees’ and higher excess charges.

For the Alan Boswell fees, we have been told that contents insurance starts from £75 per year (which works out at about £1.44 per week) which should be affordable for most people.

However this may have changed by the time you get your quotation, so do check.

You can get a free no-obligation quote from Alan Boswell Group here.

6. And finally

As we said at the start, tenants (or renters if you are not a tenant but a licensee) insurance is not mandatory.  You don’t have to have it.

You may never need it.  If you are a young single person with very few things it may not be worth it.

However if your possessions would amount to a substantial sum to replace, and particularly if you have a family, you really should consider taking out a tenants insurance policy.

Then if the worst happens – you will be protected.

This is the end of this article.

Would you like to get a quotation from Alan Boswell Group?

Either get a quote online or speak to an adviser

Alan Boswell Group