Flatmates and Tenant Insurance: All You Need to Know
Do you need insurance?
“Our landlord has insurance on the property.” Landlords purchase insurance for the structure, but not for your personal belongings or your personal liability. The landlord’s policy typically covers the building (including any garages or sheds), appliances, window coverings, or other items left in the home for your use, and liability in case someone is injured on the premises and sues. However, you will have no protection under this policy and will need to purchase your own coverage.
What tenant insurance does cover?
Some of the things a tenant’s policy will cover are:
Your personal property while at your home for almost any damage; fire, theft, windstorm, water damage, to name a few. In some cases, policies will also cover inland flood and earthquake.
Your personal property while temporarily away from home, for the same types of loss or damage. For example, if you’re travelling and your luggage is stolen, or you lose your camera, you should be covered by your tenant’s policy.
Your personal liability at home. If someone comes to visit and they injure themselves tripping over the snowboard you left by the front door, you could be facing a lawsuit. Your tenant’s policy will step up to cover the loss if you’re found negligent, as well as any legal fees.
Your personal liability away from home. If you’re skiing and you lose control, smashing into another skier, causing an injury, again your tenant’s insurance can step in to handle any resulting lawsuit.
Think you don’t need insurance?
Think again…if neither you nor your flatmate has a lot of personal belongings, then you may think you don’t need tenant insurance. However here are reasons why you still need insurance:
Is too expensive
The cost of insurance varies depending on a number of factors, including the value of your possessions. You can reduce your monthly premium by increasing your deductible – you take on a bit of the risk, and pay a lower premium. When you think insurance is expensive, think about the cost of replacing your laptop and smartphone.
Costs to replace all your Stuff
Electronics. Computers, iPods, PS4s, Xbox Ones, and more. We all have them. Your tenant insurance policy can protect them.
When you start adding up what it would cost to replace your clothes, shoes, accessories, as well as the basics in your kitchen and bathroom, you’ll be surprised. Conduct a simple home inventory to get a rough idea of what your possessions are worth.
Most policies give you replacement cost coverage on contents. Even if you bought your couch at a garage sale, you might face having to buy a new one after a fire or a water loss. And nothing ever seems to be on sale when you need it. Maybe you don’t think your belongings are worth much, but when you add up the cost to replace all your old stuff with new, you may think differently. Even the cost to just replace your clothes and shoes could surprise you.
Not covered under your parents’ policy
“As students, we’re covered under our parents’ policies.” Some insurance policies limit the value of belongings covered for students living away from their parents’ home. And most companies require you to be financially dependent on your parents and only temporarily away from their home.
“Liability? Our friends won’t sue us”
If you decide to have a party and someone is seriously injured tripping over a stack of books on your stairs, then they just may decide to sue. Or if you’re playing a recreational sport and accidentally injure someone, then you could be held liable. We all like to believe that our friends would never sue us or accidents won’t happen, but are you willing to take that risk?
Most landlords require it
Landlords usually require it. Often when you’re trying to rent a place, the landlord will insist that you have a tenant insurance policy in place.
Protect the home
Damage to the unit you’re renting. If you accidentally fall asleep while you’re cooking dinner, you could be looking at significant smoke damage to the flat. The landlord will be coming after you for the repair costs. A tenant insurance policy can cover you for smoke damage to the flat you’re renting.
Own a car?
Theft from your car. Your flat could be as secure as Fort Knox, but it’s possible that something can get stolen from your car. This will not be covered under your auto insurance but can be covered on a renter’s insurance policy.
If you’ve got things in storage (maybe you’re waiting for a new home to be built, or maybe your sports equipment won’t fit in your new basement suite), you can get storage insurance on your tenant insurance policy. Some policies may include it automatically.