When you're moving into a new home you certainly have a lot of expenses such as your rent-in-advance, moving trucks, telephone and internet set-up fees as well as cleaning that so many of us don’t stop to think about what risks we’re facing.
From burglary to fire, flooding and earth quake damage – what would happen if all the contents of your new home had to be lost? The truth is that very few of us stop to think about renters content insurance until something happens and we suffer a major financial blow having to replace everything we once had with no one to help us carry the financial burden. Renter’s content insurance may be the last thing on your mind if you're moving out of your parent’s home and into your own place for the very first time but can you really afford not to have renter’s content insurance? Consider the accumulative price of all of your electronics alone – from your lap to your mobile phone and kitchen appliances, chances are you’ve spent a small fortune on your belongings and that’s why you should have them insured.
Renter’s content insurance has a far more important function–
to protect you from any liability arising from property damage. If you’ve caused any damage to the property you're renting and your landlord files a claim, their insurance will payout to fix the damage but they will certainly look to you to recover their money. This is referred to as occupier’s liability and is automatically included in most renter’s content insurance policies. As a renter chances are you simply won’t have the money to pay for any serious property damage which you will be liable for. If as a result of negligence you’ve set the kitchen ablaze – liability cover would pay for the damage cause and if you have caused any damage to a third-party’s property you will also be covered. This means that is the kitchen fire spread and took burnt the side of a neighbor’s house – your policy would cover you for damage to your own home and that of the neighbors. If any damage is cause intentionally you will not be covered under any circumstances.
Renter’s content insurance will cover all of your electronics, appliances, furniture and personal belongings up to a specified amount depending on the level of insurance you choose. Tools, equipment and other valuable including clothing, books, linen, carpets and other items are also covered. You will also be able to insure your jewelry up to a certain amount and any other valuable items in your home. If someone steals you're credit cards you may be able to claim if they are illegally used up to a set amount as well while any cash you may have had in your home can also be covered up to a certain limit. If you have to relocate due to fire, flood or earthquake damage than you will be paid out for your temporary accommodation or, a set percentage of your complete coverage limit. If you cause damage to the rental property and are required to pay for repairs you will receive a set amount of personal liability cover – which is essentially the most important function of this type of insurance. You will also be covered for accidental damage to windows, doors, locks and walls among other items.
Premium cover vs. Basic cover
Premium plans have a lot of additional benefits that the basic plans will not cover such as replacement and repair of any household item including antiques and special items. You could also cover your belongings while they are in any storage facility, in transit or any damage incurred to your belongings while your home is being renovated or altered. The level of cover that you select depends entirely on the value of the content of your home and this can be anything up to $1 million and in some cases more. Imagine causing such extensive damage to someone’s property that you’d end up being thousands and even millions of dollars in debt. This is unlikely to happen however, its highly possible and you need to protect yourself from such a tragic occurrence. This may seem like an unnecessarily huge amount however if we consider that many properties exceed $1 million in value – you can certainly understand why this is necessary. If you own many expensive items that would be a nightmare to replace than you should opt for the most inclusive policy to ensure that you can cover the replacement of these items. If you want to take out any other type of insurance such as car or income protection insurance than you may want to search for insurers that offer discounts for people that take out more than one insurance policy as this may save you a lot of money in the long run. You may also want to look for a provider that offers no claim bonuses. As with any type of insurance it truly pays to shop around – since premiums can vary from one provider to the next without any specific reason.
When you review your policy it’s important to make sure that you have enough cover to replace your contents and that you're covered for a substantial amount of personal liability. You can also select an excess that suits you – with a lower excess meaning that you’ll have higher premiums while opting for the higher excess will l bring down your premiums quite substantially. If you do opt for the lower excess you must ensure that you have enough money put away in a savings or emergency fund to cover this at any given time. Being under insured poses just as many issues as would having no insurance at all since you’ll still have to come up with the money to pay for all or part of the damages cause which can certainly run into thousands of dollars. If you're a student you may want to look for insurers that have packages tailored to students as these are generally more affordable and still include the critical personal liability cover that you can’t afford not to have. Use an online renter’s content insurance comparison tool to get a rough idea on how much you're likely to be charged in premiums.