Useful Insurances
When you are renting a property you may wish to consider taking out an insurance to protect your possessions during the tenancy. There are three types of insurance that may prove relevant to tenants: contents insurance, personal possession insurance and landlord's insurance. Both contents and personal possession insurance are insurances taken out by the tenant to protect their belongings, whilst landlord's insurance is taken out by the landlord or letting agency to protect their property.
Insurance can be an expensive investment, and is not compulsory. If you are not planning to stay in the property for a long time you may feel that you do not wish to purchase insurance. Be aware however that if the property is burgled you will not receive any compensation for the items that are stolen. Similarly, if there is an accident and your possessions are damaged, or they are ruined in a flood or fire, you will not be entitled to any money. The area in which the property is situated will affect the cost of the insurance, and you may find insurance especially expensive if you will be living in an area with a high crime rate. However, in a high-risk area insurance is a good idea and therefore worth the money!
Contents insurance
This covers the contents of the property, usually including any household furniture, furnishings, fittings, machinery, clothing and personal possessions but often excluding business equipment. It will usually cover items that you regularly take out of the house, such as a camera or an mp3 player. You will generally have to specify the items that you wish to be covered by the policy, and you may need to take out extra insurance to cover specific items such as a bicycle or a valuable musical instrument. In the case of accident, fire, flood damage or theft, the contents of the rental property are insured and you will receive compensation for your loss. This type of insurance is often best for tenants of a privately rented property: if anything happens to your belongings or those of the landlord, you will be covered by the insurance.
Personal possession insurance
This is essentially a specialised type of contents insurance. This insurance covers usually items such as clothing, jewellery, glasses and personal valuables including your wallet. It may cover specific items of value such as a mobile phone or a bicycle when you pay extra. This type of insurance is often a better choice than contents insurance for people who are travelling around the UK on business or are travelling abroad for a few weeks. The compensation limits are generally smaller because you are insuring fewer items, often only those personal possessions that you are carrying with you. This often makes personal possession insurance cheaper than typical contents insurance. This type of insurance may also prove best for students who wish to cover only specific items of value both in and out of their property, such as a portable computer, an mp3 player, mobile phone or camera.
Landlord's contents insurance
This is a specialised contents insurance which protects the belongings of the landlord when they are not living in the property. Although the landlord and/or letting agency will ask you for a security deposit, this amount will rarely cover the cost of replacing the contents of the property in the event of a burglary, flood or fire. For this reason, landlord's contents insurance is a sensible investment for anyone renting out a property. You will not need to contribute to landlord's contents insurance if you are a tenant, but you should ask your landlord and/or letting agency if they have this cover. If they have already insured the contents of the property there is no need for you to take out a contents insurance policy as well. In this case it would be better to take out a personal possession insurance to cover your own items of value.
There are many insurance companies offering a range of insurances tailored to the needs of people living in rented accommodation and to students. Many insurance companies have a website which details the cover that their policies would give, the application and claim processes and the average cost. You may find that the internet offers you the chance to purchase a cheaper insurance policy, and many will offer you a free quotation if you fill out an insurance enquiry form on the website. If you are a student you may find that your University can advise you on companies which offer cheap insurance deals for students.
