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How Important Is Renters Insurance When You Don’t Own Much?

The cost of living is rising in the UK and in April 2022, inflation reached its highest recorded level. For many households, this will mean a tightened budget and insurance is one area that people may consider cutting costs. However, your possessions could be at risk if you don’t have adequate contents insurance in place and insurance should be considered an essential part of your household budget. Read on to find out how important renters’ insurance is when you don’t own much.

What is happening to the cost of living in the coming months?

The cost of living is set to continue to rise in the next few months because of multiple factors.

The Bank of England increased interest rates from 0.75% to 1% earlier this month, with inflation rising to 9%. The price of many consumer goods has gone up, and there has been a massive increase in energy prices as a result of the energy price cap.

Global events, such as the Covid-19 pandemic, and the Russia-Ukraine conflict have also affected prices. Delays in supply chains because of Coronavirus have caused a surge in demand for many consumer goods, causing prices to rise. The war in Ukraine has also impacted fuel and energy prices here in the UK and this looks set to continue. The conflict may even add to rising food costs as agricultural products typically exported from Russia and Ukraine are likely to become more expensive.

What are the benefits of renters insurance?

At a time when many households are facing increased costs of living, why is insurance so important for renters?

You may be surprised to learn that landlords aren’t responsible for ensuring their tenants’ possessions. Landlords must ensure the building itself but not your belongings. This should be made clear when you’re signing your tenancy agreement and most landlords or letting agents will advise you to arrange your insurance policy.

Even if you don’t think you own many belongings, you must consider how much it would cost if you had to replace them all at once – for example, if there was a flood or fire and every single piece of furniture or clothing was damaged beyond repair. Is your income sufficient that you could afford to start all over again from scratch? If not, insurance can prevent that worry.

So, what are the advantages of renters’ insurance?

Protects your belongings against theft

Renters insurance protects you in case of theft, meaning if there’s a break-in and your possessions are stolen, you’ll be able to make a claim to replace them.

Protects your belongings against damage

Renters insurance also protects your belongings against damage. Many tenants’ possessions are at risk from damage. Whether it’s from a flood, a fire in your building, or just a simple accident, contents insurance means that you’ll be able to repair or replace your damaged items.

Covers what you need

With renters’ insurance, you have the option to insure what you need. You might be happy with a standard cover, which insures your possessions against damage or theft, or you might want added extras. This could be to cover items that you frequently take outside of the home, or because you have specific items that are above the value of standard covers, such as musical instruments, medical equipment, or valuable jewellery, for example.

Peace of mind

Last but not least, renters’ insurance gives you peace of mind that should the worst happen, and your belongings are stolen or damaged, you’ll be covered so that you can repair or replace them without financial hardship.