Is insurance necessary for a UK tenant?
The number of people renting has double since 1994 according to government figures and homeownership has recently fallen to a 30 year low (source: English Housing). This leads us to ask, do tenants understand what insurance is available and necessary?
Having carried out a survey of people who are currently renting their homes, and have done so for a period of 3 years or more, in order to discover their attitude to risk when it comes to protecting themselves, their own possessions and their landlord’s property. The overwhelming response from all respondents was that they were relaxed in their approach to insurance while renting.
Every person was aware of the ability to insure their own possessions under a contents insurance policy and 90% did have some form of insurance in place with ranging cover limits – from the basic perils covered to move comprehensive cover that include protection away from the home.
The general school of thought seemed to be that this was satisfactory and that there was no other cover available that could offer more protection. Interestingly, all the respondents claimed to have lost at least part of their bond due to damage to the landlord’s property (including fixtures and fittings) upon leaving the property.
This was accepted as ‘a risk of renting’. There was an interesting relationship between respondent’s attitude to risk was and how much they had suffered bond loss over the years. Generally the higher the appetite for risk the more a person had lost. This falls in line with common sense thinking that the more concerned someone may be over losing their bond, the more they will take care of the landlord’s property. Many people who had experienced damage to their landlord’s property during the rental term incorrectly thought their contents policy would cover them or that the landlord can only fix the issue.
However, there is a secondary insurance that can fill the gap for tenants. Tenants liability insurance is specifically designed to offer protection for renters if they damage their landlord’s fixtures and fittings e.g. sanitary wear, windows, stairs, carpets and a great deal more. This insurance is often under £100 for annual cover and can often cover up to £10,000 of liability.
This insurance, therefore, offers the ‘somewhere to turn’, if a carpet is ruined and required replacing at considerable cost. Whilst the tenant is fully liable (if the root cause was their fault) the insurance would pay out a sum to indemnify the tenant for any loss.
For more information on Tenants liability Insurance click here.