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The importance of contents insurance for renters


According to research published by the Association of British Insurers (ABI) in February of 2018, the average British household owns possessions worth some £35,000. That is more than the average annual salary of around £27,000.

Yet the ABI also found that more than a quarter of those households, or around 7.5 million homes, have no contents insurance – and, therefore, no protection against risks such as fire, flooding, theft or vandalism.

Contents insurance for renters

With 4.7 million households currently living in rented accommodation, said the Buy Association on the 13th of July 2018 – that is around one-fifth of the population – the number of households without any contents insurance clearly includes many who are tenants rather than homeowners.

Tenants may be especially over-represented in the number of households without contents insurance because: 

  • some might be under the mistaken impression that their landlord has arranged any necessary insurance for the protection of their possessions and all the contents of the rented accommodation; and
  • many households in rented property might consider the expense of contents insurance to be more than they can afford.

The truth of the matter is that landlords’ insurance covers property owned by the landlord only and does not cover tenants’ possessions or contents owned by tenants – and the cost of renters contents insurance, weighed against the losses you might suffer as the result of some unforeseen event, may be more affordable than you imagined and is likely to represent good value for money. 

What does renters’ contents insurance cover?

Contents owned by tenants are exposed to just as many risks as those owned by any other household – namely, such potentially drastic events as fire, flooding, explosions, escape of water, vandalism or theft. 

Contents insurance for renters, as with the cover for homeowners, may also be extended to protection against accidental damage to your possessions.

You may typically choose between two fundamental levels of cover – replacement on a “new for old” basis or the settlement of any claim based on the current value of lost or damaged items (after the deduction of an allowance for depreciation or wear and tear).

In the first case, that means that the settlement of any claim is sufficient for you to replace any irreplaceably damaged items with completely new ones (on a like for like basis); whilst the in the second instance, the settlement is made on the basis of the current value of lost or damaged items.

Naturally, “new for old” contents policies tend to be slightly more expensive, but the alternative “wear and tear” policies are likely to be even cheaper.

Contents insurance is important for any kind of tenant 

Responsibility for insuring the contents you own is yours rather than your landlord’s whether you are renting from a housing association, your local council or accommodation in the private sector. 

If you are a leaseholder who has exercised the Right to Manage your property, remember that the building insurance for which you are paying covers only the structure of the property and that you still need contents insurance for the possessions you own within your own flat.

If you are a student – perhaps sharing a House in Multiple Occupation (HMO) – or are a lodger just renting a room in someone else’s home, you are still likely to need contents insurance for whatever possessions you own. 

CASE STUDY: Still not sure about the importance of tenants contents insurance?

Following a divorce, Mr. S moved in to rented accommodation until he found a permanent place to live. He rented two rooms on a ground floor of a shared property – one for him to live in and the other to store his furniture (such as a dining table, wardrobe etc.)

The tenant living above Mr. S experienced a flood from a burst pipe which soaked through their floor, causing the ceiling and water to fall on to Mr. S’s furniture in the room below, which was badly damaged.

Unfortunately, Mr. S had not taken out tenants’ contents insurance as he figured he’d only be living in rented accommodation for a few months and so it wasn’t worth it. This is a decision he regrets.