What you should know about contents insurance for renters
Losing or damaging something you care about can hurt both financially and emotionally.
As a renter, you may not think you have many things to cover with home insurance. But if you consider how much it would cost to repurchase all your clothing, furniture, appliances, jewellery, electronics and collectibles, you might start to think differently…
While insurance may not be able to replace the sentimental value associated with your personal items, it could help you deal with the financial loss if you need to repair or replace something. We’ve put together some things you might want to consider when thinking about contents insurance.
What is content insurance for renters?
While your landlord is responsible for insuring the building you live in, they’re not responsible for insuring your personal belongings.
This is the role of contents insurance.
It typically covers the cost of repairing or replacing your personal items within your home if they’re lost, stolen or damaged. This can include items like your furniture, appliances, clothes, computer, and jewellery.
What does contents insurance cover?
Exactly what’s covered depends on your policy, but contents insurance typically includes things like:
- Furniture and furnishings
- Appliances and household goods
- Rugs and loose floor coverings
- Clothing and jewellery
- Computers and technology
These items are usually covered for insured events such as:
- Fire (including bushfires)
- Storms, cyclone, rainwater and lightning
- Theft, vandalism or malicious damage
- Water damage
Some insurance policies may also cover costs such as:
- Emergency repairs to prevent further damage or loss to your contents as the result of an insured event
- Temporary accommodation if your contents are damaged to the extent that your home is unliveable
- Debris removal after an insured event
- Loss or damage to guests’ possessions while they’re visiting your home during an insured event.
Optional covers for contents policies
With most policies, you may be able to add on other types of cover, usually for an additional premium, such as:
Accidental damage cover: Accidental damage provides cover for the cost of unintentional events, like spilling wine on the carpet or hitting a cricket ball through a window.
Portable contents cover: Most policies have a cover limit for certain items. For example, an insurer might agree to pay $5,000 in total for jewellery, with a maximum of $1,000 per piece. If you want to insure items for more than their cover limits and have cover away from the home, you may be able to list them separately on your policy as a ‘specified portable contents item’ and cover them for their full value.
Flood cover: As the name suggests, flood cover typically covers the cost of loss of or damage to your possessions caused by flood or flood water. In Australia, there is a standard definition of flood, as outlined by the Insurance Council of Australia. It states “the covering of normally dry land by water that has escaped or been released from the normal confines of any lake, or any river, creek or other natural watercourse, whether or not altered or modified, or any reservoir, canal, or dam”. If this definition is not applicable, then the event may not be considered a flood from an insurance perspective.
When looking at a policy, it's important to find out if flood cover is part of the standard policy inclusions, or is an optional extra, as this depends on the insurer.
Motor burnout cover: Motor burnout covers the cost of repairing or replacing burnt-out electric motors in household appliances or equipment.
With all these optional extras, you should check the product disclosure statement (PDS) to find out exactly what’s included and what’s not included within a specific insurance policy and whether it meets your needs.
Does contents insurance cover personal items outside the home?
Contents insurance typically covers your personal belongings and valuables kept within your home as standard. However, you can usually choose to include portable contents cover within your policy, which insures certain portable personal items you take with you away from your home. This is particularly relevant for today's modern technology like mobile phones, laptops and cameras, as well as items you might take on holiday like jewellery, handbags or clothing. It can also be known as personal effects cover and is available for an additional cost.
How much cover could I need?
The amount of cover you need depends on your individual circumstances and is ultimately your decision, but it’s worthwhile thinking about the following things as a starting point.
Your belongings: how much are they worth? There are a number of contents insurance calculators that can help you estimate the total value of your belongings.
Your preferred level of protection: do you want cover for standard events only, or want to add optional covers? Are you happy to have your belongings covered just inside your home or do you want your portable items covered when you spend time away from your home?
Your budget: how much can you afford to pay in premiums?
What about personal valuable items?
Personal valuable items may be covered under your insurance policy as an optional extra often referred to as ‘portable contents cover’. Portable contents cover is designed to cover the personal items that you may take with you when you leave the house for an additional premium.
Examples of portable contents items could include:
- Clothing and other personal items
- Clothing, cosmetics
- Jewellery and watches, including SmartWatches
- Sunglasses, spectacles
- Wallets, purses, handbags, travel bags, luggage (but not the contents unless otherwise listed)
- Hearing aids, wheelchairs, mobility scooters
- Musical instruments
- Prams, strollers, baby capsules, carriers
- Electronic equipment
- Mobile phones
- Photographic equipment, video cameras, binoculars
- Laptops, mobile and portable computing devices
- Sporting goods (note that some sporting equipment may not be covered if you use them outside the home – make sure you check your PDS.)
- Non-motorised sporting equipment, including bicycles
- Non-motorised watercraft (surfboards, sail boards, surf skis, canoes and kayaks)
- Portable camping and fishing equipment, picnic sets, travel blankets
Portable contents cover may include cover for unlisted portable contents, or you may be asked to list the items you would like cover for. Some insurers may give you both options. Unlisted portable contents means all of your items are covered under a total amount, although some items may have individual limits which could mean they are not insured for their full value. For example, a policy may cover jewellery and watches for up to $5,000, with a maximum of $1,000 per piece. Also keep in mind that even though you have taken out ‘unlisted portable contents’, some items must be specified on the policy in order to be covered, for example, mobile phones. Listed portable contents provides the option to have specific portable content items insured for their full value.
What’s included in portable contents cover, and which, if any, of your personal valuable items need to individually listed may vary for each insurer, so always check the PDS to find out what’s covered and make sure it suits your personal circumstances.
Making a claim
If you need to make a claim against your policy benefits, your insurer will most likely ask you to provide evidence of the value and ownership of your lost or damaged items. This is usually accepted in the form of an original receipt for the item and close-up photos of it, a valuation from a jeweller and a police report, if required and available.
If your item goes missing, rather than being damaged or stolen, you’ll need to prove to your insurer that you have, in fact, lost it. They might ask you when you last wore or used it, when you last saw it and where you kept it.
If your claim is successful, your insurer may repair or replace your items, reimburse you up to their cash equivalent value, or reimburse you up to the contents sum insured amount/item limit. Generally, your insurer will choose one of these forms of compensation at their own discretion.
Looking after your belongings
Taking the time to do your research and weigh up your options could help you find the best insurance policy option for your circumstances. Make sure you read the PDS before you make a decision on any type of insurance cover.
And remember, most insurers won’t approve a claim for theft or burglaries where there are no signs of forced entry, either, so don’t forget to lock your windows and doors before you leave and keep your home secure.