Tenants must purchase insurance to protect their home contents. Here is why

A home is an emotionally and financially valuable asset for most of us. Be homeowners or tenants; it is a place where we find comfort and happiness and create memories. A home is a safe place for us. Unfortunately, we often see fire, theft, burglary, and natural calamities damaging our homes and the content inside. Any such damage causes mental as well as financial distress. Therefore, a home insurance policy is paramount to securing our home against any damage. It is affordable and the most practical way of ensuring financial protection and peace of mind.

Home insurance purchased by homeowners is relatively common. But in today’s time, tenants should also consider financially protecting their belongings and personal items with Home Contents Cover. A householder package policy will cover a wide range of liabilities such as electronic gadgets, household appliances, kitchen appliances, valuables, home furniture and fixtures if damaged due to fire, natural calamities, such as flood, earthquake, cyclone and storm, burglary, theft and electrical equipment breakdown.

Let us take a close look at the coverage offered by a package policy for tenants:        

Fire: Fire in buildings is a common phenomenon nowadays. It can happen due to a short circuit and fire spreading from outside. A big fire can cause considerable damage to the building structure and thereupon contents inside your home which results in emotional and financial loss. However, if tenants have an insurance policy, damage/ loss to the valuable home contents by insured perils can be covered. 

Protection against natural calamities: It is always possible that the contents inside your rented home can get damaged due to natural disasters like flood, cyclone and storm. And if it ever happens, home insurance will cover the financial loss incurred and reimburse you for the repair/ replacement cost of the damaged items. 

Also Read: Defect Liability Cover vs Property Insurance: Key differences you should know

Additionally, you can opt for Alternate Accommodation add-on. In case of damage to your rented accommodation, you might need to temporarily move to an alternate accommodation while the previous accommodation is under repair. However, the rent at the alternate accommodation might be higher. But if you buy the add-on cover, the difference in rent will be covered and paid by the insurer. 

Burglary and theft: Burglary generally happens when we are away, making it easier for thieves to steal anything from home and vandalize without resistance. Along with the burglary, loss due to theft can be covered as an extension in the package policy.

Personal Accident: As a tenant, you can also avail of personal accident coverage for yourself/spouse in the unfortunate event of death. 

Liability Cover: The package policy will further protect you against bodily damage and death to third parties and domestic employees due to unforeseen mishaps. For instance, if your house help or a guest gets injured in your home, you will not need to worry if you have this cover, and ensure the best treatment for them. 

A package policy also offers additional features that are not covered in a standalone home insurance policy. For instance, the breakdown of electronic and mechanical appliances like refrigerators, washing machines, LED TV and laptop will be covered by this policy. The package policy even protects against baggage loss or damage, including personal belongings, during travel within the country.

Also Read: Term insurance premium by few insurers could see hike this year

You can also opt for individual covers if you do not want to opt for a package policy. However, a home insurance package policy provides comprehensive protection.  

Here are a few points to keep in mind: 

• Provide full disclosure at the time of purchasing a home insurance policy. 
• As soon as any physical loss or damage occurs to home contents due to an insured event, you should immediately inform the insurer about the loss. 
• In case of physical damage to the item(s), the insurer will pay you the repairing cost, and if it is a total loss, you will be reimbursed up to the total sum insured based on the valuation of the item(s).

The owner of your rented accommodation might purchase a home insurance policy to cover only the building structure. However, as the tenant, you need to buy a policy to financially protect your home contents. While we do not want to think of the worst, being prepared for the worst is often the wisest thing to do.   

The article has been written by Rakesh Jain, CEO, Reliance General Insurance. Views expressed are personal.