Do you need rental home insurance?

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If you live in a rental property, you won’t have to worry about home insurance, as that responsibility lies with your landlord. But you may want to consider protecting your own belongings that you keep indoors.

Renters insurance is a type of contents insurance specifically for renters. It does not cover the house itself, but it does provide protection for personal items such as your furniture and valuables.

If your belongings are damaged or stolen in an unforeseen event like a flood, fire or break-in, having a contents insurance policy could help you with the cost of replacing them.

Choosing not to purchase inventory insurance, on the other hand, would be like paying out of pocket to replace your stolen or damaged possessions, as any home insurance policy held by your landlord would only cover damage to the home itself.

What does tenant home insurance cover?

Coverage for your belongings can vary depending on the insurance company you take out a policy with and the type of policy you choose, but most will cover the following categories:

  • Furniture
  • Electronic
  • Jewelry
  • Clothes

So pretty much anything under your roof should be eligible for coverage. Some policies even cover food spoilage, in the event that a weather event causes a power outage in your home.

But you may be wondering if items you frequently take with you outside the home can be covered. Many insurers offer portable contents insurance in addition to a contents insurance policy, to cover valuables such as photography or music equipment, laptops and engagement rings.

As for what events you may be covered for, again, this may differ from insurer to insurer, but generally includes:

  • Theft or attempted theft
  • Fire (including bush fire)
  • Flooding caused by adverse weather events or plumbing issues
  • Earthquake
  • Sudden impact (like falling from a tree)

Be sure to confirm exactly what is covered by the policy you are interested in before applying. Some policies will cover certain items or events by default, while others may charge additional fees.

How much does tenant home insurance cost?

The amount you’ll pay for renters insurance, known as the premium, will depend on a range of factors, including:

  • Where you live – Different parts of the country are exposed to different levels of risk when it comes to events such as earthquakes, floods, fires and thefts. If you live in a location that has a high level of risk for one or more covered events, you will likely pay a higher premium than lower risk locations.
  • The value of your content – If you live alone in a one-bedroom apartment and have a minimalist approach to material possessions, your insurance premium will likely be much lower than that of a family of five living in a two-story house. Likewise, a renter with a house full of luxury designer furniture will likely pay a higher premium than a renter with mostly thrifty decor.
  • All extras added – Some insurers offer add-ons such as portable contents insurance. If you decide to take advantage of this and you have many high-value items that you need protection for, it could significantly increase your premium.

Also, like other types of insurance, you will usually have to pay a deductible when you make a claim approved by your insurer. Like your insurance premium, the cost of your deductible generally varies.

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