Renters insurance (also referred to as contents only insurance) offers a financial safety net against specific events relating to property management, such as theft of, or unforeseen damages to, your belongings (e.g. furnishings, clothing, jewellery and home electronics).
This type of cover is specifically designed for people who are renting, which is a big chunk of Aussies. According to the Australian Bureau of Statistics (ABS), nearly one third (32%) of Australian households rented their home in 2017-18.1
Without cover, you’ll have to foot the costs associated with repairing or replacing your belongings should anything happen to them.
When you live at a rental property, you don’t need to organise home insurance (i.e. building insurance) – that’s the landlord’s business. However, everything inside the four walls that you own and the landlord doesn’t is the tenants’ responsibility.
Why is renters insurance important?
If your home is destroyed and you don’t have renters insurance, it might cost you more than a year’s salary to replace your possessions. This might sound excessive; however, the ABS reported the mean value of contents in Australian dwellings* at $69,400 in 2017-18.2
So, when was the last time you took stock of all your belongings?
It’s easy to underestimate the number of household belongings you have and therefore underinsure your contents. But, would you be prepared to pay for the damages caused by a fire, flood, storm or other emergencies?
In 2017, Emergency Management Victoria stated that one in two Victorians didn’t have insurance, or enough insurance, to cover the cost of replacing their home or household possessions in these events.3
When taking out a renters insurance policy, you need to make sure the sum you’re insured for is enough to replace all of your contents.
How does renters insurance work?
Renters insurance works by paying a premium to an insurer to protect your belongings in a range of scenarios that are outlined in your policy – and the cover does differ per policy and provider.
If your belongings have been damaged, destroyed or stolen in a covered event, you will need to submit a claim to your insurer. If your claim is accepted, you will more than likely have to pay an excess to process it. Your claim may need to include receipts or photos of the damaged or stolen items to prove how much they’re worth and that you owned them.
Does renters insurance replace items or pay out money?
If you make a claim on your renters’ insurance for a damaged, destroyed or lost item, your insurer will generally replaces your item with the same item or a similar model.
However, if your insurer doesn’t replace your valuables with a suitable alternative, they might settle your claim by:
- repairing the items through their repairers
- paying you for the cost to replace or repair the items
- providing a cash settlement
- offering you a gift card.
It’s essential to make sure your contents insurance includes a new-for-old replacement benefit; check your PDS to determine your contents will be replaced with new items.
What events does renters insurance cover against?
Standard renters insurance policies may cover your contents from:
- fire damage
- storm and rainwater damage
- lightning damage
- damage from explosions, earthquakes or impact
- theft or attempted theft
- malicious damage or vandalism
- escape of liquid (e.g. damage from a burst water pipe; policies may not cover the replacement of the water pipe itself)
- damage during transit (if moving house)
- accidental breakage of glass, ceramic and sanitary fixtures.
Higher-level renters insurance policies will typically cover a broader range of events that standard policies don’t. This may include cover for contents left outside (i.e. bikes on the lawn) or food spoilage (i.e. if your fridge stops working and your food goes off).
With some renters insurance policies, you may also be able to add on optional extras (typically at an additional cost) for your contents, such as:
- flood cover
- motor burnout cover (when a fuse blows and damaged home equipment or items stop working)
- personal effects cover (for items you regularly take outside the home).
Which belongings are covered by renters insurance?
Renters insurance policies cover your valuables if they’re stolen, damaged or destroyed by certain events. Renters insurance can cover a range of belongings, such as:
- whitegoods (washer, dryer)
- technology (laptops, tablets, cameras)
- designer clothes
- Jewellery, your belongings’ value might limit how much you can claim for specific items (e.g. up to $2,500 for a hand-woven carpet or rug), or might apply exclusions for, particularly expensive items.
You may be able to add cover for specified contents (e.g. a diamond wedding ring) up to a certain amount (i.e. $15,000), at an additional cost.
These items are typically only covered within the bounds of your property (e.g. if you lose your wedding ring around the home). However, if you add on personal effects insurance, you can cover these items if you take them outside the home (i.e. if you lose your ring while going for a run).
Such security doesn’t come for free, though, as adding this type of cover typically increases your monthly premiums.
How does renters insurance work if I’m renting a room in a share house?
If you’re renting out a room in a share house and want renters insurance, you can’t specify cover for possessions in a specific room. However, you can potentially split the costs of a contents insurance policy with your roommates and get cover for the value of all your combined belongings.
If you are getting a renters insurance policy for a share house, you may have to watch out for some exclusions. For example, some insurers might limit how many roommates can be listed under one policy. So, if you’re living in a large share house, make sure your insurer will cover you all under the same procedure.
Also, your valuables may not be covered if they’re stolen or damaged by your roommates. Check your Policy Disclosure Statement (PDS) for specific information regarding your cover.
How much does renters insurance cost?
Specific costs are hard to determine, as they will vary depending on your situation. When you apply for contents-only insurance, the cost of your renters insurance may be affected by a range of factors, such as:
- the amount or sum you’re insured for
- The estimated value of your contents
- history of claims, thefts or burglaries at the address
- if your home is used for business purposes
- your suburb’s crime rate and median rent price
- your home security
- age and structure of your home
- risk of natural hazards (e.g. the likeliness of your home flooding)
- whether you wish to cover items you take outside the home (personal effects insurance).
So, how do you choose a renters insurance policy?
Firstly, work out the value of your belongings with an online calculator to determine how much cover you need. Just make sure your policy adequately covers the replacement costs for all of your belongings.
Secondly, decide which events you’d like your renters insurance to cover. For example, if you live in a flood zone, make sure your renters insurance covers flood damage.
Once you’ve figured out what you’re looking for in a policy, you’ll only need a few minutes to use our contents insurance comparison service. By using our handy tool, you can see the features and prices of different renters insurance policies, without needing to search through multiple websites to find great-value cover.
When the dog chews up the carpet or a clumsy kid knocks a hole in the wall, it’s the renter who is responsible for the accidental damage to the rental property. Any damage that’s caused by the tenant or their guests falls to the tenant to repair.
Damage that happens over time, like cracks in the wall or other types of wear and tear, is the property’s owner’s responsibility to fix, as it’s their duty to ensure their property is fit for someone to live in.
If you’re the one who is responsible for accidental damage to the rental property, you may be required to arrange and pay for the repairs yourself.
What else are renters liable for?
As a renter, you’re also responsible for the contents that you own, i.e. all personal belongings you bring with you into your rental accommodation.
This means you will need contents insurance (also known as renters insurance) to cover your valuable possessions should anything happen to them. These may include:
- furniture items – lounge, armchairs, wardrobe, bed – the lot
- hi-fi equipment – TVs, home theatres, stereo systems
- sporting equipment – home gym or treadmill
- bulky old-school gaming items – pool table, table tennis, foosball
- musical instruments – guitars, drums or keyboards
- your prized sports memorabilia (including framed posters)
- your family heirlooms.
Your personal effects – e.g. your handbag, camera or bicycle – are best covered by personal effects insurance, which is usually an optional extra available under renters insurance.
Given today’s climate of steep housing prices, more Australians than ever live in rental accommodation and regularly move houses, taking their belongings with them. In 2017-18, 32% of Australia’s population were renting.
With so many people renting these days, it’s a good idea to give your belongings an additional safety layer by choosing a contents insurance policy to protect your lifestyle.
Contents insurance for renters, sometimes referred to as ‘renters insurance’, is cover for anyone interested in looking after their belongings. Standard contents insurance policies will offer you varying levels of financial protection against a range of different events:
- Fire damage. The loss or damage of your belongings from accidental house fires or arson attacks would be devastating but can be insured against. Damage due to a bushfire is also generally covered.
- Theft. This covers you for theft and damage caused by burglary or attempted burglary.
- Storm damage. Lightning, hail and heavy winds are common examples of how a storm may damage or even destroy your contents and valuables.
- Legal liability. Should an incident occur at the property while you’re renting that leads to a court case, renters insurance provides legal liability for the tenants.
A closer look at contents insurance for renters
Above was a list of general standard inclusions (i.e. what is typically found on a policy). However, other rental insurance policies might offer greater levels of cover, including:
- Explosions. If your rental property has gas, or you’ve brought a gas BBQ with you, cover for explosions cover should definitely be something to consider.
- Water damage. Severe contents damage can stem from something as trivial as an overflowing bathtub, sink, toilet, or a leaky washing machine or dishwasher. It could also come from heavy rain runoff and storms.
- Vandalism. While vandals will likely target the exterior of your home, they may also damage your belongings. This can include outdoor furniture, gardening equipment, bicycles, etc.
- Natural disasters. Many residential areas are vulnerable to bushfires and floods, while some seaside suburbs are prone to erosion risk. Most policies will include tsunami or earthquake cover, but flood cover may cost extra.
- Moving house. Renters insurance can cover your items and furniture while they’re in transit, though additional terms and conditions may apply.
Contents insurance extras and add-ons for renters
If you’re after additional cover, you can also get renters insurance extras to cover the loss, theft or damage on:
- Accidental damage. Renters insurance can include cover for accidental damage to glass and ceramic fixtures, like basins and glass cooktops.
- Jewellery. Family heirlooms are often our most treasured possessions. If you own anything valuable that would be difficult to replace, it’s worth getting them covered.
- Clothing and accessories. Consider the cost of replacing your entire wardrobe if the house was lost in a fire. Even if you don’t ‘dress to the nines’ every day, it could be an expensive proposition.
- Furniture. As a renter, you may not have much in the way of furniture – but your bed, wardrobe and any big-ticket items may still be worth insuring.
- Electronics (e.g. laptops, televisions). Electronics can be easily broken in a disaster, are a desirable target for thieves, and will be sorely missed when you lose them. While you can watch Netflix on your phone, chances are you’ll miss your TV if it’s stolen or destroyed – so it’s best to insure those kinds of items if you can!
- Appliances (i.e. white goods). If you rely on your washing and drying machine, fridge and dishwasher, you might want to check to see if white goods and motor burnout is available on your policy or as an optional add-on.
- Your music/movie collection. If you have a record or film collection, you’ll probably be aware of rare titles being targeted by profit-savvy thieves. However, even if all you own are ten-year-old Seinfeld DVD’s, it could be worth making sure you can replace them.
- Artworks. From framed photographs to prints and paintings, artworks can hold significant sentimental value, not to mention enormous monetary value. Depending on the value of the item, coverage for artworks may cost extra.
You’ll also need to be mindful that any items taken out of the home need to be insured as personal effects.
Renters insurance also covers you from legal liability, should a visitor accidentally trip over and injure themselves at your place.
Be sure to read the Product Disclosure Statement (PDS) of a policy to see exactly what’s listed though, as coverage can differ between insurance providers.
Smart renters should endeavour to look after all of their belongings with the right insurance policy. That means taking our renters insurance for their belongings, as well as comparing car insurance for their vehicle
Why compare renters insurance?
If you’re renting and need to get insurance cover for your possessions, comparing policies may help you find a better price – as well as make it much easier to find the coverage you’re looking for.
We make comparing policies quick and simple.
Our free renters insurance comparison tool allows you to compare policies from a number of Australia’s leading insurers, side-by-side. You can compare and select cover in minutes, so why not see what we have to offer?