It’s common understanding that if you own a home, you have Home Insurance. Many tenants however are not aware that they are not covered under a landlord’s home insurance.
The insurance that tenants can purchase to protect their belongings is called Home Contents insurance. It’s a good and simple way of getting covered, for an affordable price. As a tenant, you buy Home Contents insurance to protect what you own only. So, home insurance should always be bought, even if you are just renting, to protect your possessions against unforeseen loss.
What is a Home Content Insurance plan
Home Contents Insurance is a general insurance plan designed to protect the value of movable items within a residential property. Home Contents Insurance therefore, complements Building Insurance, which covers the structure and would have been purchased by the landlord.
Even if you do not have a lot of valuable items at home, it is important that you insure yourself against the risk of items getting damaged. It is easy to overlook that homes may have safety issues, and there lies the possibility that we could lose our dear possessions in unforeseen circumstances. We need to remind ourselves that at times floods, fires, burglary or other unforeseen disasters can strike us at the worst time and leave us inconvenienced. This is a good reason to consider buying home contents insurance even if you are renting.
So your next question is – will insuring my personal belongings be expensive? Indeed, the price is commonly used as a basis among buyers when selecting a home contents insurance plan. However, with increasing competition among insurers, buyers are spoilt for choice in the marketplace. Price does not need to be the only determinant.
How do I choose the right plan for me?
There are different plans for “Insured perils” vs “All risks” – This determines how extensive risk exposures are covered under the plan. How much coverage you need depends on the value of the articles you own. For example, you might need more coverage if you own a few Van Gogh paintings.
Another aspect you need to be aware of is the “First loss” vs “Full sum insured”. Settling claims across first loss or full sum insured determines the value of the financial losses or damages claimable against the plan. Claims settled on a first loss basis are without penalty for being underinsured. Please note that under another clause called the “average clause”, the insurers can reduce payment on a claim by the percentage you are under-insured.
You also need to be aware that Home Contents Insurance normally has a sub-limit for unspecified items. For full-cover, valuables must be itemised for insurer’s review and additional premium. Examples of valuables are watches, paintings, works of art, jewellery, antiques, precious stones and other collectable items. So please remember to itemise all your valuable possessions.
You also will need to decide the sum insured for your home contents. The general rule of thumb is the replacement cost of your home contents should it be completely destroyed.
There are also common exclusions. They may differ among insurers and hence it is prudent to take a closer look when doing comparisons.
Also Tenants Should Buy Home Insurance
There are also secondary benefits that some plans are able to offer, like: 24-hour home emergency services (locksmith assistance, plumber/ electrician referral, pest control services and air-conditioning services), provide cover for accidental death and theft of licensed pet dog within insured dwelling. Many insurers throw in rudimentary personal accident coverage as well.