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Contrary to popular belief, tenants need contents insurance just like homeowners. After all, your rental property can still be subjected to a break-in or perhaps even accrue damage during an accident or natural disaster. If an ‘act of God’ does end up resulting in damage to your personal property, you should still have insurance cover in place to make sure that you don’t lose thousands of dollars’ worth of assets in one fell swoop.
So what should renters be looking for when it comes to contents insurance? Well, the answer to this question is actually quite simple: renters insurance.
Today, we’ll be taking a deep dive into all things renters insurance, unpacking what it covers and what it typically doesn’t, and finishing up with a little guide on how to secure the right renters insurance policy for your own personal insurance needs.
In the simplest terms, renters insurance is designed to provide contents insurance cover to customers who aren’t owner-occupiers. You can take out renters insurance as a single tenant or you could even organise to take out a shared renters policy with your housemates. This makes renters insurance one of the most flexible types of residential insurance cover available on the market today.
Speaking of flexibility, as renters insurance isn’t designed to provide cover for the rental property and its fixtures (that should ideally be covered by your landlord, if they’re also spend-savvy and have taken out landlord insurance), you can typically expect renters insurance policies to cost less than combined home and contents insurance policies.
The costs of your insurance premium, however, will largely depend on a few key factors, including:
Even if you don’t feel like you have anything of value in your rental property, having key possessions like a laptop or even your wardrobe be misplaced or damaged has the potential to set you back thousands of dollars. For this reason, taking out renters insurance can provide immense peace of mind that you can stay financially secure and make your rental payments even in the event of a burglary or damage to your rental property. In this regard, taking out a renters insurance policy can be a great way for renters to save money.
Now that you know what renters insurance is, let’s look a little closer at what this unique insurance policy typically covers. When you take out a renters insurance policy, you can expect to receive financial support from your insurance provider in the form of:
Different insurance providers may offer their own additional inclusions, so it definitely pays to shop around and see what all your shortlisted providers can offer you. Once you’ve been able to find a policy with a reasonable premium and cover for all insured events you’re looking to secure cover for, then you can get started on your contract.
We mentioned that the total cost of your insurance premium may be dictated by any add-ons or extras you opt to include on your renters insurance policy. But what typical add-ons or extras would be available to you when finalising your ideal renters insurance policy?
Some of the more common add-ons for these policies can include cover for high-value items (like jewellery), cover for portable items (laptops, tablets, cameras, etc.), and cover for accidental damage to personal possessions in the rental property. It’s also important to note that renters insurance typically doesn’t cover motor vehicles, plants and shrubs in outdoor garden spaces, stock assets, loose or unset gemstones in jewellery, and fixtures in your rental property (as these should be covered by your landlord’s own landlord insurance policy).
Renters insurance policies typically also don’t provide cover for acts of gross negligence, or any acts that may potentially have been purposefully or intentionally designed to cause damage or destruction of property.
Now that you know what to expect from your renters insurance cover, all that’s left to do is find the right policy for you. Thankfully, this can be as easy as following five simple steps:
Naturally, finding the right renters insurance policy to suit your needs must start with calculating how much you’d ideally like to be covered for, and then looking into which insurance provider can give the most cost-effective premium and excess to facilitate that coverage. So be sure to calculate your insurance needs carefully to reduce your risks of being underinsured.
Keep in mind too that sharing your policy with your housemates can be a great way to enjoy some additional savings whilst ensuring that you and your fellow tenants can all maintain adequate insurance cover for your personal possessions. And yes, this isn’t the first time we’ve advocated that ‘sharing is saving’ either.
With all these considerations made, you should be well on your way to finding a renters insurance policy that caters to your unique insurance needs. Just remember to revisit your policy regularly to make sure that it continues to provide adequate cover as you accrue more personal assets.
Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence.