Insurance for tenants is often overlooked. Just because you don’t own a house, doesn’t mean you can’t protect your valuables. So where to start?
Home insurance isn't just for people who own a house. Contents insurance protects your property against things like fire, flood and theft – and offers other benefits as well.
The terms "renter's insurance" and "contents insurance" are generally interchangeable. There are a few policies called renter's insurance that offer lower benefits and don't let you set your own sum insured. They might be cheaper, but if you've got more than $25,000 in belongings they won't suit your needs. None of the policies in our contents insurance comparisons have these conditions.
What counts as contents?
The short answer: just about anything in your house that isn't bolted down. That includes the kettle, the curtains and the couch – but not the cat or the car or the contents of the pantry. Every policy document will have a section on what is and is not defined as contents.
Most insurers will have limits for how much you can claim for certain high-value items like jewellery, watches or artworks. If your record collection, for example, is worth more than the insurer's default limit, you have the option to get its value specifically listed on your policy, which will increase your premium.
What's covered in contents insurance?
Insured events
Contents insurance covers the cost of repairing or replacing the belongings you keep at home if they're damaged or lost in one of the "insured events" covered by your policy.
When you buy a policy you tell the insurer how much it will cost to replace all your belongings – this is called your "sum insured". This is the maximum they'll pay if you lose everything.
All insurers cover the same basic list of events, although each has their own definitions, restrictions and exclusions. The list of insured events should include:
- fire and explosion
- flood (sometimes optional)
- storm and rainwater
- lightning
- accidental breakage of glass, ceramics, etc
- earthquake and tsunami
- theft and attempted theft
- vandalism and malicious damage
- impact damage (e.g. falling trees)
- sudden escape of liquid (e.g. burst pipes)
- accidental loss or damage (this is usually optional, or included with top tier products only)
Damage caused by pets usually isn't covered, and if it is there might be exclusions for scratching and biting. Same goes for wild animals – think mice chewing on your laptop's power lead.
Can I insure individual items?
You sure can. These are called "specified" or "listed" items, and you can have them included on your policy for an additional premium. With most insurers, listing an item means it's also covered for accidental loss or damage when you're out and about, making it useful for phones, cameras, bikes or jewellery.
There are a couple of reasons you might want to list an item:
- You want the item to be covered away from home, but don't want portable contents cover for other things.
- The item's replacement cost is greater than your policy's sublimit for unspecified valuables. For example, many insurers cover unlisted items of jewellery up to a set amount per item and/or overall. If you have a piece that is worth more, you can insure it for its value, separate to this limit.
Can I insure contents away from home?
· Portable contents cover protects you against accidental loss or damage for things like jewellery, laptops and sporting equipment – every insurer will have their list of included or excluded items. This cover usually comes with limits – for example, $1000 per item and $7500 overall per claim – but you can also list your valuable belongings for higher amounts.
· Cover for some portable contents usually comes as an optional extra, although a few premium products include it as standard. Some policies have a set excess for portable contents claims that might be different to your standard excess.
· Portable contents are covered anywhere in Australia, and many policies also offer cover in New Zealand. If you travel farther abroad, you'll often be covered for the first 30 days, although cover might be limited to a certain amount, or to certain items such as jewellery and watches.
Additional features
On top of this, most policies will offer additional benefits to help you get back on your feet. Your policy might include cover for some or all of these:
- Underinsurance safety net, if your sum insured isn't high enough to replace all your contents a few insurers will increase your cover by up to 25%.
- Contents in the open air, like your yard or porch. There are usually limits on how much you can claim, and some insured events might not be covered.
- Electric motor burnout, in case your washing machine or fridge carks it. Some policies also offer a few hundred dollars to replace spoiled food and medications if your fridge or freezer dies.
- Cover while moving house, with a few weeks overlapping cover at your new and old addresses, as well as some cover while your things are in transit.
- Visitors' contents, usually up to a few hundred dollars.
- Vet bills, usually only if your pet is injured in a car accident or insured event, but some policies cover illness as well. The amount you can claim is much less than what a separate pet insurance policy covers.<
- Temporary accommodation if you can't live in your home after an insured event. For renters, this usually covers the additional rent you have to pay to move into a similar place.
Does contents insurance cover damage to my rented home?
Not always. All contents insurance policies come with at least $20 million legal liability cover. This pays legal costs and compensation if you damage another person's property or are responsible for their injury or death. Having this cover means the insurer will handle the legal case on your behalf.
However, some policies exclude accidental damage done to your home if you are a tenant. Suncorp, for example, will only cover fire and overflowing water damage. Youi only covers damage to carpets, fixtures and fittings, up to 10% of your sum insured. Westpac only covers accidental breakage of glass, like mirrors or ceramic cooktops.
Accidents happen: an overflowing washing machine could damage flooring, or a kitchen fire might make the place uninhabitable. Your landlord has insurance to protect their building, and their insurer might come looking to recoup their costs. This is where having legal liability cover can protect you.
Legal liability cover in home insurance also protects you away from home. If you accidentally damage someone's property or hurt them while going about your day, your contents insurance will cover you (although you need to keep an eye on the long list of exclusions).
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