Renter's Insurance

What is Renter's Insurance?

When you’re renting an unfurnished property, you’ll be bringing a lot of stuff that has value to you. This “stuff” is known as your contents, and renter insurance can help cover the cost of repair or replacement if they’re stolen or damaged. Just think of it as contents insurance, because, put simply, that’s what it protects...the contents of your rented home.

How much can it cost?

This depends on a few factors. Firstly, it’ll depend on what value you place on all your belongings, and this is replacement value, not re-sale. Imagine if you had to start all over again and replace absolutely everything you own. You might be surprised at just how much stuff you’ve accumulated over the years and what it’s worth. Then it’ll depend on what suburb you live in and what kind of property you’re renting, as well as the level of any existing home security.

Rental property insurance quotes vary considerably from insurer to insurer and state to state, so it pays to compare contents insurance quotes with iSelect*.

What are the benefits to renters?

The primary benefit is peace of mind in knowing that your belongings will be repaired or replaced in an insured event. So if something unfortunate and out of your control happens, like a burst pipe, you likely won’t be at a loss. Or if you go away on a holiday, there’s no need to be concerned about potential loss of your insured possessions while you’re away from them.

How do I calculate the value of my belongings?

Calculating the value of your possessions, or contents, is an important first step to getting renter’s insurance. The total value of your personal assets is called your sum insured. It’s basically the maximum payout you’d receive if everything needed to be replaced. To determine your sum insured, you can:

• Take inventory: make a list of your possessions, then categorise them into groups like electronics, furniture, jewellery, etc.
• Determine the value: for each item, determine how much it would cost to replace it. Remember that most insurers will pay the replacement cost, not the value. For example, your 10-year old laptop may be worth $500 in resale value, but might cost much more to replace with a new one.
• Factor in sub-limits: Your policy may have sub-limits for specific categories, like $2,000 for artwork. Take note of any items that may exceed the sub-limits of your policy, as you might want to take out additional coverage for those.

Adding up the total (minus any items that exceed your policy’s sub-limits) can help you determine the value of your contents.

What does it typically cover you for?

In terms of ‘insured events’, every policy is different, but here are some examples of what can be covered:

• Fire and explosion
• Flood (sometimes optional)
• Storm and rainwater damage
• Lightning strike
• 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)

Typically, a contents insurance policy will also outline certain events that are not covered. Some policies also might not cover damage from your pet, or theft committed by someone you invited into your home. Exact exclusions will depend on your insurer and policy.

What isn’t typically covered under Renter’s Insurance?

When it comes to renter’s insurance, pretty much everything you brought to the house is considered contents, with a few exceptions. For example, your dog, or your stash of Tim Tams in the pantry. Additionally, items that form part of your home or are stored outside of the home, like your car, likely won’t be covered. Instead, your car will generally be covered under your car insurance policy.

Your policy document (Product Disclosure Statement) will cover what is and isn’t considered contents under your policy, but here are some examples of items that are likely  not covered:

• Unset precious stones or gems
• Plants and trees that grow outside the home
• Pets
• Bicycles used for racing
• Motor vehicles, caravans & aircraft
• Motorcycles
• Motorised watercraft
• Goods used to earn an income from your home

So what types of items are generally covered?

A lot of the belongings you bring to your rental property can be considered contents under your policy. Let’s take a look on some items frequently covered by renters around Australia:

• Appliances
• Bicycles
• Furniture, rugs, and blinds owned by you and not your landlord
• Computers, TVs, and other electronics
• Clothes and jewellery
• Sporting and fitness equipment
• Tools
• Toys

Can I insure individual items?

Many insurers will put limits on how much you can claim for expensive possessions like jewellery, art, cameras, and other big ticket items. For these items, it might be worth looking into getting the item specifically listed and insured on your policy. For example, renters with a diamond wedding ring can choose to add it to their policy.

Can I insure items outside of my home?

If your camera is stolen from your rented home it can be covered under your policy, but what if it’s stolen when you’re out of the house? Portable contents insurance is an optional extra you may be able to add to your policy to cover damage or theft of valuable items when you’re away from home. Many policies will cover your items anywhere in Australia, and some may also cover New Zealand. If you’re travelling abroad, consider looking into travel insurance to protect your valuables while outside of the country.

Will it cover damage?

Sometimes. Contents insurance policies can include up to $20 million in legal liability cover, which can compensate the property owner in the event of damage to their property. This can also include the legal fees, if needed. However, keep an eye out with exclusions in your policy, as certain types of accidental damage done to your property if you’re a tenant might not be covered.

Keep in mind that the owner of the property likely has home insurance, as well as landlord insurance which can help protect their property.  

What if I live in a share house?

When living with housemates, you might decide to take out a policy together. If you’re in a situation where one person (maybe you) owns the majority of the valuable items in the house, you might not all contribute equally to the policy. Keep in mind that if one person makes a claim on your shared policy, your premium will likely go up the next year.

If your housemates aren’t up for a policy, you can get your own policy that only covers your individual items. However, some insurers won’t cover you on your own if you’re living with multiple people who aren’t related to you.

How is it different from landlord insurance?

The key difference is that renter’s insurance is taken out by people renting out a property, where landlord insurance is designed for the property owner. If your landlord has an insurance policy, it may cover some types of damage to their property and protect the permanent fixtures they’ve provided. However, your landlord’s insurance policy almost always won’t cover the items you bring to the house when you move in.

Compare Renter's Insurance policies with iSelect

Whether you’re about to move out for the first time or have been renting for a while and want to protect your valuables, we’re here to help. Use our comparison service to compare contents insurance policies, or call 13 19 20 to speak to our friendly team.

Sources:
1. https://moneysmart.gov.au/home-insurance/contents-insurance
2. https://moneysmart.gov.au/home-insurance/choosing-home-insurance
3. https://moneysmart.gov.au/mobile-phone-tablet-and-laptop-insurance
4. https://moneysmart.gov.au/car-insurance/add-on-insurance

Last updated: 27/10/2020