Insurance is a must for tenants

May 2004

Insurance is a must for tenants - broken window Most home owners understand how important home and contents insurance is in protecting their property, but many people who rent never arrange insurance and therefore leave themselves open to potential losses of hundreds or even thousands of dollars.

While the owner of a rental property will generally insure their property against accidents or damage, the owner is generally not responsible for any loss or damage that is caused to tenants' belongings where tenants have been negligent.

For example, if a rental property has adequate window and door locks but the tenants belongings are stolen because they didn’t activate the locks, the tenant is responsible for that loss.

In this case, if the tenant had contents insurance they would be able to claim the loss against that insurance.

Some people have an “it won’t happen to me” attitude which can be very dangerous. Others just never get around to arranging insurance and take their chances that nothing will happen.

According to insurance firms burglary, fire and water damage are the main causes of losses incurred by tenants. Yet a simple insurance package will cover tenants for loss as a result of these incidents.

Contents insurance, which is the most common type of insurance for tenants, is available from all major insurance companies and will generally cost around $300 a year or a dollar a day…not much to pay for peace of mind!

Most insurance companies are able to give you a quote over the phone and many also provide a facility for you to obtain your own quote on the internet.

The bottom line is that tenants should carry insurance. That way, a tenant does suffer any losses they won’t have to start again from scratch to replace their belongings.