Renters Insurance: Everything You Need to Know

A home insurance policy is really important to protect against the financial loss suffered if the house is damaged due to any natural or man-made calamities. That’s why people who own homes get home insurance. It’s there to help them if something happens to their property and they lose money because of it. But what about people who rent homes? Do they need renter’s insurance as well?

Yes, they do. Even if you rent a place, you still need insurance for the contents of the home. If your things get lost, stolen, or damaged, having insurance helps you avoid losing money. Alternatively, if the household contents also belong to the landlord, the tenant has the financial responsibility to ensure that the contents provided by the landlord are not damaged due to use. If things get broken or taken, they might have to compensate the landlord for the damage or theft. That’s why having renter’s insurance is really helpful. Let’s figure out what this policy is and why it’s helpful.

What is Renter’s Insurance?

A renter’s insurance policy is a policy which covers the loss, theft, or damage of the contents of the house in which a tenant lives. These policies are home insurance plans which cover only the stuff inside the house. They are called renter’s insurance policies because tenants usually buy a home insurance policy covering their household contents.

What is covered under Renter’s Insurance?

Coverage under a renter’s insurance in India can be divided or subdivided into the following categories –

Coverage for the Contents of the Home

A renter’s insurance policy covers the contents of the home against these different risks:

Coverage for Financial Liability

Besides covering the contents of the home, the renter’s insurance policy also covers the legal liability that the tenant faces if any individual is hurt in the tenant’s home. For example, if another individual (who is not the tenant, his/her family or the landlord) suffers any injury when at the home of the tenant, the tenant might face the financial responsibility to pay the injured individual’s medical expenses. Renter’s insurance also helps with this kind of legal responsibility.

Coverage for Special Assets

Under this cover, the special assets of the tenant are covered. These assets can be high-value assets like jewellery, expensive gadgets, works of art, curios, and many more. This insurance covers your things if they get damaged by natural disasters, accidents, or stolen.

Add-ons under Renter’s Insurance

Apart from the mentioned coverage, renter’s insurance policies offer various add-ons that enhance and expand the plan’s protection. Some common extensions are mentioned below:

Rent for an Alternate Accommodation

If you are unable to live in the rented house due to damages which are being repaired, the policy pays you the cost incurred in seeking alternate accommodation.

Coverage for Portable Electronics

This add-on covers portable electronics such as laptops, portable gadgets, and more.

Jewellery and Valuables Cover

With this add-on, your precious jewelry and other valuable items can receive coverage.

Terrorism Cover

This add-on covers damages to your home’s contents caused by any terrorist activity.

Pedal Cycle

With this add-on, your owned pedal cycle gets additional coverage. If your cycle is damaged by fire, accidents, or any natural or human-made disasters, this add-on covers the loss suffered.

What is not covered under Renter’s Insurance?

Damages arising from the following instances are not covered by a renter’s insurance policy:

  • Intentionally Damaging Property (Wilful Damage)
  • War, rebellion, mutiny and related perils
  • Valuable items are not covered unless otherwise specified
  • Old content which has lived its useful life is not covered
  • Any type of consequential losses is not covered

Why is Renter’s Insurance required?

A renter’s insurance policy becomes a valuable cover for tenants because of the following reasons:

  • The policy covers the financial loss that tenants face if their belongings are damaged due to any calamity.
  • If the house is damaged, the landlord covers repairs, but if tenants lose their belongings, they bear the financial loss themselves. This loss is covered by the renter’s insurance policy which gives tenants financial relief.
  • Because the renter’s insurance policy also includes third-party liability coverage, it provides tenants with financial security. If someone is injured in their rented apartment, they won’t be responsible for any resulting losses.
  • The policy also provides compensation if you accidentally damage the landlord’s property within the house.
  • The available add-ons in the policy expand the coverage and offer additional financial protection.
  • With very low premiums, buying a renter’s insurance policy for your household contents is easy.

How much does Renter’s Insurance Cost?

The premiums of a renter’s insurance policy depend on various factors. These are as follows:

  • The premium for insurance is influenced by the value of the contents being insured; higher value means higher premiums.
  • The risks faced by the property based on its location, age, safety, security measures, and many more, have a direct impact on the premium. If the risk is perceived to be high, the premiums would be higher.
  • Choosing add-ons alongside the basic policy will result in increased premiums.

Top 6 Things to remember when Buying Renter’s Insurance

Before you buy a renter’s insurance policy, it’s important to consider the following factors:

  • Make sure that everything you own is included in the policy coverage. If something isn’t covered and gets damaged or stolen, you’ll be responsible for covering the costs.
  • The sum insured by the policy should be sufficient to cover the replacement cost of the damaged or stolen contents.
  • Select the required add-ons if they suit your coverage requirements
  • Make sure to check different life insurance options before you decide to buy one. Comparing allows you to buy the plan with the most inclusive coverage features at the most reasonable premium rates.
  • Keep the bills and other relevant documents of the content insured under the policy.
  • If you own valuable items like jewellery, make sure to consider adding them to your insurance policy as their loss would be costly to replace on your own.

As a tenant living in a rented house, you’re typically not responsible for any damage that occurs to the structure of the house. Yet, if your belongings are damaged or stolen, you’re the one facing a financial loss since those contents are your responsibility. Therefore, insuring the contents of the home is a wise move and since the premiums are not very high you can easily buy a renter’s insurance policy. So, consider getting a comprehensive renter’s insurance plan to safeguard your household contents from potential damages.