Time to read : 4 Minutes
Do Renters Need Contents Insurance?
Nearly one third of Australians rent their home.
And according to the latest census, the number of renting households has increased by 17.5% since 2016.
💁🏾 Renters are often at the mercy of their landlords too, with little rent control and limited housing security.
💍 Contents insurance is one thing you can do as a renter to create a little more security for yourself.
What you need to know
Many Australians used to consider renting a temporary solution early in life. These days we could be renting for life.
🙏 If you’re a renter, getting contents insurance may still be far from your mind but it shouldn't be.
💻 After all, your landlord’s insurance only protects the building itself, and not your assets.
Contents insurance can help protect your belongings against natural disasters, like floods or bushfires. Just read the fine print to make sure you are covered for what you want.
It can protect your valuables like jewellery, family heirlooms, tech or bicycles, against damage or theft.
You can even add on cover for protection for portable items, so they’re covered when you’re not at home.
Boarding pets can even be added to your content insurance if your place is unliveable, though that is often at a premium.
You can also choose accidental cover which can be pretty handy if your TV smashes when your neighbour drills into your common wall.
Getting contents insurance while living in a shared house can be tricky, but it’s not entirely out of the question.
Depending on the insurer, you may be able to just take out insurance for yourself. Most, however, will require all housemates to take out a policy.
In this case, it’s best to provide as much information as possible. And, you won’t be able to insure any damage or theft caused by your housemates. Also, there may be limits on how many people in one household may be covered.
What to consider when getting contents insurance
Contents insurance is not a one size fits all situation.
🗃️Policies can vary depending on where you live, so it’s important to find a cover that suits your needs and living situation.
You live in a fire-prone area. In this case, make sure your policy includes bushfire cover and not just household fires. Similarly, you should keep an eye out for flood cover if you live in a region that’s plagued by heavy rains.
You need cover special items. Think about any special items you own, like precious jewellery, that may not be covered by the standard policy due to their value.
You’re planning on travelling with your items. Would you like your items to be insured outside of your home? For example, when you travel or commute? This type of cover can come in handy for portable items, like tablets or laptops, but it also covers these items should your bag get stolen when you’re on the road.
Investigate the extras on offer. You can include things like emergency storage if your place is getting repaired, or additional funds to move to another property.
Things to be wary of...
It's always good to make a point of checking the fine print.
Watch the coverage limits, insurers will often have a set price for an item. Let's say the insurer has capped TV replacement at $1K, but you spent $2K – meaning you would have to pay the difference to replace it.
Check the waiting period and always read your policy updates for any changes that could affect your cover.
Update your cover when you get new contents, otherwise it's easy to end up under-insured for what you actually have.
How much will it cost?
The price on contents insurance varies depending on how much you want to have covered, and in turn, how much stuff you have.
A one bedroom apartment will be much cheaper in general to insure than a four bedroom home.
Then the area itself will factor in – is it flood/bushfire prone, or is it a low or high crime rate suburb, and does your building have a security system or not?
Or whether you live in an area frequently plagued by natural disasters. It also depends on how safe your neighbourhood is.
If the crime rates are higher where you live, your premiums may reflect this, since chances of break-ins or robberies may be greater.
For a basic contents policy Australians pay on average $45 a month.
Be aware: like just about everything else, the price of contents insurance has also increased.
How can you save cash?
If you want to save money, it pays to shop around.
Set a budget based on your income and expenses to avoid over-extending yourself financially.
Adjust your excess to lower your annual premiums, which means you will pay less per month for the cover but have to pay a higher fee if you make a claim.
Valuing your items correctly can also help, by insuring only the items that are the most important to you to replace.
Check the inclusions, you may not want everything covered and that can help you reduce your premium.
Did someone say bundle?! Yes, one of the easiest ways to save your precious coin is to see if you can combine car and home insurance.
Be careful though! Sometimes buying a combination can be more expensive than getting them separately. So, do your research.
The bottom line
Taking out contents insurance when you rent a property may not always be the first thing that springs to mind.
But at the end of the day, your belongings are your responsibility – and accidents can happen to anyone.
🦺 Best to be prepared.
