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The tenant’s guide to contents insurance

The tenant’s guide to contents insurance

Whether you’re new to renting or a seasoned tenant, it’s important to protect your household items and valuables with contents insurance.

Contents insurance, also known as ‘renter’s insurance’, covers the loss and damage of household items not structurally attached to a property. This can include replacing items damaged or destroyed by fire, storm and theft, with some insurers covering ‘accidental damage’ such as breakages and/or spills.

Most insurers will offer ‘new for old’ cover, replacing items with the latest model, which will result in a higher value than the item’s current worth. However, some insurers offer ‘replacement value’ cover, replacing items at their current value, which when considering depreciation, may be significantly less than the item’s original purchase price.

What’s covered in contents insurance?

There is no one-size-fits-all insurance policy so what is offered by one insurer may not be offered by the next. Generally speaking, contents insurance includes the following:

  • Furniture​
  • Soft furnishings, including decorations, mirrors, artwork, ornaments, rugs​
  • Electrical items, including kitchen appliances, computers, fridges, washing machines, TVs, whitegoods​
  • Kitchenware​
  • Entertainment items, books, dvds​
  • Clothes, shoes​
  • Jewellery​
  • Toiletries, cosmetics, medicine​
  • Linen, towels and bedding​
  • Outdoor furniture, bbq and heaters​
  • Gardening equipment​
  • Recreational and sporting goods​
  • Cleaning items​
  • Food and drink.

What’s not covered?

Every insurer is different, so it pays to do your research to understand what may not be covered in your policy.

Generally speaking, many insurers only cover items kept inside the property and exclude anything lost or damaged outside of the home. However, many insurers offer different types of ‘portable cover’ which usually comes as an add-on with a higher premium. Some insurers will cover items taken overseas, but in most cases, you will need to cater for this in your travel insurance.

You may find that some insurers put limits on the amount of cover offered for valuable items. For example, some insurers will put a cap on jewellery or laptops, which in some cases can be as low as a few hundred dollars.

Some insurers choose not to replace damaged or destroyed items due to floods. Likewise, many insurers exclude the cover of motor burnout in electrical items, such as in fridges and washing machines.

Most insurers will offer some level of cover across these areas but usually as an add-on to the policy at a higher premium.

How much cover do you need?

Many insurers offer online tools and calculators to help you identify how much cover you need, which take into consideration how many bedrooms and living areas there are, how many people live in the property, and so on.

A good way to ascertain what you need to insure is if you tipped your house upside down — what would fall out? Just about everything that isn’t structurally attached to your home should be covered in your contents insurance.

You should also take some time to think about how much your household items would cost to replace in today’s money, especially if the insurer you choose offers ‘replacement value’ cover only. For instance, if you spent $200 on a microwave three years ago, could you get the equivalent today for the same price? It’s likely to be more, so do some research and cater for any items that may have risen in value.

Handy tips

  • Obtain several quotes a few weeks before you move into your property. This will give you enough time to carefully consider your options and ensure you get the right type of cover to suit your needs​
  • Request a copy of each insurer’s product disclosure statement (PDS) and read the fine print carefully to understand what is and isn’t covered. Check and compare each PDS for what constitutes as ‘damage’ or ‘loss’, as definitions may differ across each insurer​
  • Make sure your contents insurance policy starts from the very first day you move into your property, regardless of how much you’ve moved in, i.e. the whole house or only a few boxes​
  • Review your insurance policy every 6–12 months to ensure you have the right level of cover to cater for any newly purchased items. Likewise, make adjustments due to the depreciation of existing items.

If you would like more information about contents insurance, please contact your local Peter Blackshaw Property Management team.

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