Moving into a new apartment or rented home comes with a long list of administrative tasks that need to be accomplished, besides simply moving your belongings. You need to switch over utilities, set up your automatic rent payments, notify TCD of your new assessment number and the list goes on. Is updating your contents insurance a part of that list? Do you even have contents insurance? Bermuda has a lot of rented accommodations, for a whole gamut of reasons and, partially because it isn’t mandatory to have it, a great deal of the island’s renters go without contents insurance. However, contents policies are often less expensive than you might think and provide protection for a wide range of scenarios, hurricane damage amongst them.
Renters should understand that when your landlord buys insurance on the home that they own and rent to you, they are almost always buying insurance on the building only. In the majority of cases, they cannot insure your belongings for you on their policy, even if they wanted to – they have no financial interest in your belongings. This means that should something happen to your contents, your landlord themselves would not suffer a loss that their insurance could cover.
If there is an accident at your home that is caused by someone else – either by your landlord or a third party – and your contents are damaged as a result, the person causing damage would be responsible for repairing or replacing your contents. Depending on the circumstances, the other person’s insurance coverage may or may not bear the costs but ultimately, it’s on that person (and not you) to pick up the tab.
Hurricane damage, however, is not something that can be easily ascribed to being anyone’s fault. It is certainly possible to have a dispute about whether the property was adequately protected in advance of the storm and thus damage might be a result of a landlord’s negligence, but there would be no guarantee that the courts would agree with that position. Furthermore, as we saw with Humberto’s twisters last year, many storms have additional elements for which no amount of vigilance could reasonably prepare.
Buying your own contents insurance to protect your belongings in the event of a storm – or a fire, or one of the many other unfortunate events that can happen in a home – is a much more reliable method for protecting your interests in a rented dwelling. Contents insurance would cover your belongings for hurricane damage in the event that the windows blew in and damaged your couch, and the only one at fault was the storm itself.
Not only would contents insurance help you replace that couch, but the coverage that you purchase should also include an allowance for alternative accommodation expenses. This means that if your home is damaged to a point where it cannot be lived in before repairs are made, there is an amount available for temporary rented accommodations elsewhere while your space is being remedied. That amount is a percentage of your total contents Sums Insured, which is useful to keep in mind when selecting a reasonable Sums Insured.
Determining a reasonable Sums Insured for your contents is often more complicated than estimating the replacement value of the building that houses the contents, but as a general rule, you almost always have more contents than you think you do. There are some tools online for assisting with a best-guess estimate of what your contents values are likely to be, and insurers also have checklists that you can utilize. Simply put, in order to evaluate your Sums Insured, you should walk through your space, room by room, and tally up the value of everything you own. Remember other than your clothes and shoes, everything else can be insured for the amount that it would cost to replace that item – not its depreciated value.
Most policies have sublimits within their contents insurance for valuables and in the event of a claim, only a maximum percentage of the total sums insured would be allocated for valuables. If you are the proud owner of several high-end watches and one second-hand sofa from e-moo, speak to your insurer and confirm that your valuables-to-contents ratio fits within the cover restrictions so as to avoid any unfortunate surprises if you do have a loss.
This might all seem a bit overwhelming and that there is a lot to think about. Contents insurance is both simple and complex – everyone’s mix of “things” is different and the insurance solutions will vary slightly in line with that mix. Fundamentally though, the possessions we have in our lives are usually important to us – sometimes because they’re special and sometimes because we just can’t afford to replace all that we have – and one of the best ways to protect our possessions is with contents insurance. Call or email your insurance provider and walk through your individual needs before the wind starts to blow.
At Freisenbruch, we believe in great personal service, quality insurance coverage and unbiased advice. Make sure your home and possessions are protected before the storm. Call 296-3600 to discuss your homeowners policy coverage or email us at email@example.com
75 Front Street, Hamilton
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