Insurance for Residential Tenants

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When tenants are living in rented accommodation it is the landlord's responsibility to take care of the building insurance. However, this does not take care of the tenant's contents and possessions or damage caused by the tenant or the tenant's friends and visitors to the landlord's fixtures and fittings. 

There are also several other risks which tenants should consider. It is well worth thinking about the benefits to be had through a relatively inexpensive tenant's insurance package.

For example, comprehensive cover can be arranged which includes:

• Full all risks cover for your house contents
• Cover for damage to landlord's fixtures and fittings - protects your security deposit
• Malicious damage and vandalism
• Occupiers and personal liability
• Alternative accommodation and rent payments
• Frozen food
• Money and credit cards
• Extended cover to possessions when outside and away from home.

In addition tenants may consider taking out accident, sickness and redundancy protection by way of protecting their rent payments.

Landlords rarely encourage their tenants to buy tenant's insurance but this is a huge oversight as tenant's insurance can help protect the tenants' property and may even shield the landlord from some liability.

The insurance covers the items within the dwelling. If, for example, a storm or floor led to a tenant's property being damaged inside the property, the landlord's insurance policy would pay to have the property itself repaired. But, for example, the tenant's hi-fi, television and furniture would be unlikely to be fully covered. However, if the tenant had tenant's insurance, it would cover these items.

As well as providing cover for the tenant's belongings, the tenant's insurance would cover a stay in an hotel whilst the storm damage was being repaired.

Tenant's insurance can also be a vital safeguard where the tenant can be held liable for certain aspects of the property. For example, if it is the tenant's responsibility to maintain the garden and walkway, and someone is injured when walking across, then the tenant - and not the landlord - may be liable. Tenant's insurance would protect the tenant in the event of a claim resulting from an injury on the premises if the tenant was responsible for the upkeep of that area.

It is especially important to encourage tenants to purchase tenant's insurance in areas where the crime rate is high. The insurance will cover personal items that are stolen from the rental property, or even when they are away from the property. However, if the property or neighbourhood has a history of problems, such as repeated break-ins, tenants may have difficulty getting a tenant's insurance policy.

Tenant's insurance works in a similar way to a household insurance policy. There is a premium, usually payable monthly, as well as an excess payment on any claim. Some policies offer lower monthly premiums in exchange for a higher excess payments.

The tenant needs to decided on an amount of cover needed in relation to what they can afford - in other words, to weight the costs against the benefits obtained by the cover in terms of the actual risks involved. The policy should be enough to cover all of the tenant's main belongings. The amount of cover and therefore the monthly premium is usually available on a sliding scale.

A Tenant's insurance policy would typically provide two methods of reimbursement: A cash value policy will pay out the actual value of the personal belongings at the time of loss. For example, if your tenant's hi-fi was purchased for £499, but is now 2 years old, it may have a value of only £150, therefore the tenant would receive £150 on a successful claim.

The other method of reimbursement is new-for-old. This type of cover provides enough money to purchase a new replacement, though some companies have arrangement with equipment supplies to supply a replacement they which specify.

Even where a tenant's belongings have a low financial value and may not be worth insuring on a cost benefit basis, one personal injury claim where the tenant can be held liable can bankrupt them. It's far safer to pay a small monthly premium and have peace-of-mind.

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