Contents insurance for renters: what you need to know
If there’s an accident, natural disaster, or break-in, not having insurance can leave you stressed and take a huge chunk out of your bank account. Contents or renters insurance is designed to protect you in situations like these and help you get back on your feet.
We go through what you need to know about contents insurance for renters, and the features to look for if you decide to take out a policy.
What does contents insurance for renters mean?
The terms “contents insurance” and “renters insurance” are often used interchangeably, however there are sometimes small differences between regular contents insurance and policies advertised as “renters insurance”.
Renters insurance is specifically designed for tenants, and is usually a bit cheaper. It covers the personal belongings and furnishings or renters. It may also cover accidental damage to the house (such as if you accidentally put a hole through the wall), as well as legal costs if someone injures themselves on your property.
Renters insurance does, however, usually have more exclusions and limits than standard contents insurance. This means that while it’s usually more cost-effective, it may be too basic a cover for some people’s needs, and leave them vulnerable to underinsurance.
Should renters get contents insurance?
While your landlord will need to take out their own home insurance, their policy won’t cover your belongings. If your house or flat has been furnished by your landlord, it’s their responsibility to insure those furnishings as well.
However, renters who want cover for their personal possessions (and peace of mind) should get contents insurance.
What does contents insurance cover you for?
Different contents insurance policies cover different things. A policy will usually cover accidental loss or damage to items like furniture, whitegoods, appliances, electronics, clothing, jewellery, and more, if caused by an insured event.
This basic list of insured events usually includes:
- Fire
- Storm and lightning
- Theft and attempted theft
- Vandalism
- Earthquake and tsunami
- Damage caused by impact (such as falling trees)
- Burst pipes and leaks
Ensure your policy is suited to the types of accidents your area is prone to, such as cover for floods in a flood-prone zone.
Can I get contents insurance for my sharehouse?
You can either take out contents insurance for your own belongings, or get a policy that covers the whole home. Not all insurers will cover homes with more than a certain unrelated number of people living there, so check the fine print.
If you take out a policy with your housemates, then each one of you can choose how much they want their belongings insured for, and you can divide the premium accordingly. Then if it comes time to make a claim, you can split it. Choosing a policy with higher excess and paying annually (rather than monthly) will lower the overall premium.
Keep in mind that you likely won’t be covered if one of you forgets to lock up and you’re robbed. Similarly, most insurers won’t accept a theft claim if the thief is invited in by someone living at the home.
Features to look for in contents or renters insurance
Calculate the value of your belongings
Before you shop for contents insurance, calculate the value of your belongings to see the level of cover you need. Doing this will also help you figure out which items are worth insuring. It’s a good idea to include as much detail as possible, such as receipts, serial numbers, photos, and condition where possible.
Here are some of the features you should consider when taking out contents insurance. It isn't a comprehensive guide, but you can find out more about contents insurance in our Home and Contents Insurance Buying Guide.
Type of cover
Most contents insurance policies offer ‘new for old’ cover, which covers the full cost of replacing your items with new ones, which often cost more. Getting replacement value is optimal, but it’s also more expensive.
Some policies will offer the value of your items, covering their value at the time they’re insured. Because the value of an item likely depreciates over time, you may be out of pocket if you want to buy a new item of similar quality to replace your lost or damaged item.
Inclusions
If you have particularly expensive items, such as jewellery or rare items, take extra care to ensure that they’re covered. Some items may require you to take additional cover.
You can insure individual items - called “specified” items - and have them included in your cover for an additional premium. With most insurers, having a specified item means it’s also covered for loss or damage when it’s taken away from the home.
Exclusions
You should always check what isn’t included in your policy. For example, contents insurance probably won’t cover your valuables if they’re damaged or lost due to your own negligence.
Also check what items won’t be covered so you can decide whether to add something. Making a list of all the items you want covered will help you easily cross-check what will be included in the policy.
Extra features
Portable contents cover
Portable contents cover provides a level of financial cover for personal items that you take out of your home regularly. This could be a handbag, laptop, jewellery, a musical instrument, or something else.
Underinsurance protection
Policies with underinsurance protection will cover up to 30% more than the sum of your contents if you haven’t insured your contents for enough to cover the cost of repair and replacement.
Accidental damage cover
Most contents insurance policies don’t include cover for accidents, such as staining the couch or smashing a mirror. If you want cover for this, consider adding it to your policy.
Benefits
Some policies offer benefits, such as replacing locks and keys after a break-in, or cover for your contents when you move home.
Check for discounts
You could score a discount if you have certain safety features in place, such as deadlocks, smoke alarms, a security system, or fire extinguishers. It might be worth contacting your landlord or property manager to see if this can be done at no cost to you, as it’s also in their interest to keep the property protected.