Living in a rental property? Make sure rent is the only price you pay.
Even if you don't own your home, you probably still have a bunch of things that you care about and want to protect. Renters insurance is there to make sure you can replace all your cherished possessions if a thief makes off with them, a fire destroys them or even if you just drop them and break them.
Want to protect your belongings?
What is renters insurance?
Renters insurance is basically contents insurance under a different name. In many cases it's referred to as "contents-only" insurance.
Your landlord will have insurance for the building only - meaning you'll need renters insurance to protect your electronics, sporting gear, jewellery and basically anything else that's not nailed down.
What types of contents insurance for renters are available?
There are several categories of contents insurance that are relevant to renters in Australia. These are:
- Contents insurance. This covers your belongings from a range of events while they're in the home, including theft, storm, fire, flood, burst water pipes, vandalism and more. On its own, it only covers your items when they are inside the home and in a few other situations like on your patio or in transit to another destination.
- High-value contents insurance. This is an optional extra that lets you insure high-value items like jewelry and artwork. Items above a certain value usually need this extra protection.
- Portable contents insurance. This is also an optional extra that protects certain items when they are with you outside your home, like watches and phones. You can also buy it as a standalone policy since it will also cover these items at home.
- Accidental damage cover. This is optional cover you'd add to a standard contents insurance policy. It protects you from accidents like your children knocking over a vase or you putting your foot through the ceiling while cleaning the attic.
Why do I need renters insurance?
Whilst you may not own your home, your possessions still hold value and it’s important to protect them.
Keep in mind the following:
- You are not covered by your landlord’s insurance. Many renters assume that a landlord’s insurance will cover the renter's contents as well, which unfortunately is not the case.
- Your assets add up to more than you might think. If your home is gutted by fire and you have to replace everything you own, you might have to fork out tens of thousands of dollars to replace your possessions.
- You can still obtain insurance if you live in a share house. The process of purchasing a policy for the contents of shared accommodation does take a little extra effort, but it might prove incredibly valuable if, for instance, you’re a student who depends on an expensive computer and specialised equipment.
- You might benefit from liability cover. If someone injures themselves in your home you could be liable for hefty medical and legal fees. Liability cover might help you cover the costs.
What affects the cost of renters insurance?
The cost of your insurance premium will be calculated on the basis of several factors:
- The location of your home. Premiums are normally higher if you live in a bushfire-prone area, or in a neighbourhood with a high crime rate.
- Your home security. Deadbolts, window locks, cameras, and alarms all help to make your insurance cheaper, as do deterrents such as CCTV cameras or an alarm system.
- Your level of cover. Naturally, the more optional extras you select, the more your premiums will increase. For example, if you opt for cover that will replace lost items with new ones, it will be more expensive than covering the replacement value, which depreciates over time.
What does renters contents insurance cover?
This is actually three questions in one:
What types of items can you protect with renters insurance?
You can insure almost anything that's not nailed down including:
- Furniture, rugs, blinds and other furnishings
- Portable swimming pools
- Sporting and fitness equipment
- Computers, TVs and other electronics
What events are these items protected against?
When the items are in your home/yard, the typical home renters insurance policy can protect them from the following types of damage. Some of these are automatically included in your policy and some of them are optional add-ons that cost extra:
What other features does renters insurance offer?
Here are some of the additional benefits most home renters insurance policies offer:
- Legal liability protection. This protects you if a guest injures themselves or damages something while they're in your home. Also covers you for a wide range of damage you cause to others or their property while you're anywhere in Australia.
- Refrigerated food and medicine spoilage. Pays to replace your refrigerated food and medicine if an insured event knocks out your refrigerator.
- Motor burnout. Pays to repair or replace an appliance under 7 years old if the motor burns out or fuses. Some insurers include this feature for free, while others charge extra for it.
- Contents that you temporarily remove. This protects your items if you move them to a new home or to a bank deposit box. It will protect them for a set period of time (usually around 90 days) at the new location, but not during the transportation or while they are in your car.
- Pet protection. Most policies won't cover damage caused by your pets unless you pay for a special pet add-on. This will cover accidental damage caused by your pet, like knocking over a vase but it won't cover damage from scratching, chewing or urine. The pet pack may also covers vet costs if your pet is injured in an accident and boarding costs if a listed event damages your home and it's not safe to keep your pet there.
- Temporary accommodation. Pays to put you up in temporary accommodation if your home is unlivable after a covered event.
- Lock replacement. Pays to replace your keys and/or locks if they're lost, stolen or damaged.
- Outdoor items. Covers garden furniture and other belongings you keep outside.
What should I look for in a policy?
You should consider three main things when deciding what cover you need:
- A policy that covers your risks. Choose a renters insurance policy that gives you protection for your belongings. You don’t need cover for the building itself, that's the responsibility of your landlord. Generally you won’t need to be covered for events such as earthquakes and impact. However, if you live in a flood prone area, ensure you take out flood cover.
- Good value. Look for a balance between reasonable premiums and adequate cover. Make a list of the things you’re most worried about replacing, such as expensive jewellery or a laptop you constantly use. Then find a policy that provides a generous limit for those items, but that also offers benefits such as discounted premiums based on your home’s security features.
- The right extras. There's a wide range of optional extras for renters insurance. Liability, food spoilage and cover for bicycles and other sporting goods are popular add-ons. However, you usually pay a slightly higher premium for any additions, so make sure you select the best options for your circumstances.
What are the key differences between renters and landlords insurance?
Both policies cover core events, such as fire, theft and water damage.
Renters insurance includes cover options that are tailored specifically to renters' needs, such as insurance for belongings in transit while you move from one address to another, as well as liability insurance.
|Renters insurance||Landlords insurance|
|Covers personal contents in a building.||Covers the building structure itself.|
|Cover for temporary accommodation if an insured event makes your residence impossible to live in.||Cover for loss of rental income.|
|Cover for extra living expenses while your home is being repaired, such as an electricity reconnection fee.||Covers you for additional costs related to rebuilding or repairing a home after an insured event, including debris removal and architect fees.|
|Cover for accidental damage to ceramic fixtures such as basins and baths.||Cover for deliberate or malicious damage caused by tenants.|
|Cover for portable items that are often taken outside the home, such as jewellery or electronics.||Cover for the cost of repairs to the home or for fixtures that are permanently attached to it (such as carpets or light fittings).|
Does contents insurance for renters cover valuable items?
Renters insurance will cover extremely valuable items like jewellery, artwork and collectibles but they're treated a little differently than all your other stuff.
For most items you insure, you'll just add up the value of everything and submit one total value to the insurer. No need to tell them specifically that you'll be insuring two TVs, an Xbox, three phone and a load of furniture.
However, you will most likely have to list your extremely valuable items one-by-one on your policy. That's because most policies have limits on what you can claim for any one category of item, for example $2,500 per item of jewellery.
Sometimes you need more than that and that's when you need to specify your valuables and the amount you want to insure them for (these are called specified items). Now you can get around that $2,500 jewellery limit and insure that $15,000 Rolex.
What about items I take with me outside the home?
Your renters insurance will cover your items when they're outside the home, but only as far as your yard. If you want cover beyond that, you'll need to add portable contents insurance to your policy.
This will cover items like your jewelry, laptop, phone, camera and other valuable items anywhere in Australia and New Zealand and for a limited amount of time overseas (typically 30 days). It will protect you against damage, accidental loss and theft.
Like contents insurance, you will have to specify some items separately, especially if they are worth a lot.
Is renters insurance worth it?
It's easy to overlook how much valuable stuff you own. Stop to consider all the electronics, furniture, jewellery, clothing and sporting equipment you have and what you would do if a fire came through and wiped it all out.
It's a scary thought, and that's why renters insurance is a worthwhile investment. A basic policy can cover up to $50,000 worth of belongings for less than $10 a week.
It's bad enough to experience a devastating loss and all the stress that goes along with it. Knowing that you won't also have to spend tens of thousands of dollars replacing everything will go a long way toward easing the burden.
What is the best renters insurance in Australia?
The best renters insurance is the one that meets your needs and offers you the most value. That means the policy that's best for one person will be different than the one that's best for someone else.
Here are a few questions you can ask yourself when deciding which one is best for you:
- Do you have any special risks? You'll want a policy that covers you for the risks your actually face. If you live in a flood zone, the best policy for you will have flood cover. If you have rambunctious kids, the best policy will probably have accident protection.
- Do you have any extremely valuable items? If so, the best policy will be one that either offers a high enough sub-limit or allows you to insure it separately as a specified item.
- Do you have any motorised items? If you have any motorised items, like an expensive vacuum cleaner or a washing machine, you'll get a lot of value out of a policy that offers motor burnout cover. Many policies charge extra for this cover but the best one for you might be one that offers it automatically.
- What condition is your building in? If your building is in pristine condition and your apartment is well protected, a policy covering fire and theft only might be enough for you.
- Do you carry expensive items with you when you're out? If you want additional protection for certain items you take outside, you'll need portable contents insurance. Since this will cover these items while they are inside and outside, the best policy will be one that allows you to keep these separate from your indoor items so that you're not insuring them twice.
How to make the most out of your renters insurance comparison
When comparing insurance policies, you'll want to compare on more than just price. Sometimes it comes down to features and event the fine print. Here are some tips to help you make the most out of your comparison:
- Look at the sublimits. You might have $30,000 worth of contents cover, but did you know that might not be enough to cover a $2,500 watch? Most insurers have sublimits for certain types of items and these limits can vary from insurer to insurer. So when comparing policies, you'll want to make sure the sublimits line up.
- Look for discounts. Some insurers offer discounts including discounts for applying online or for taking out more than one type of insurance with them. When comparing policies, see if there are any discounts that would tip the scales in favour of one policy over the other.
- Look at the exclusions. Some policies will exclude certain items that other policies will insure just fine. For example, some policies will pay to replace photographs but others won't.
- Look at the features. There are some features that insurers include automatically which others make you pay extra for. For example, some policies will automatically cover your appliances if the motor burns out, but other policies will charge you extra.
How to calculate the amount of renters insurance you need
When determining how much cover you need, it's important to calculate how much it would cost to replace all of your items and to work out what risks you face. Many insurers offer online calculators that can help you come up with your final figure but here are the steps you can follow if you're doing it yourself:
- Take an inventory of all your stuff. Go through your place and list out everything you own onto a sheet of paper and group them into categories: electronics, clothes, furniture, fitness equipment, jewellery, etc. For collections like clothes, DVDs and similar, you don't have to list them out one-by-one. You can just write out "100 DVDs".
- Determine the value of each item or collection of items. Work out how much it would cost to replace each item or collection of items, not how much they're currently worth. There's a big difference. If someone steals your 5-year old TV, it will cost you much more to replace it with a brand new one than what the current one is worth now.
- Find out what your policy's sub-limits are. Your policy will have sub-limits like $1,500 per computer or $2,500 total for all artwork. If any of your items or collections are worth more than this, put a star next to them on your list. These are your specified items that you'll have to list separately on your policy.
- Calculate the totals. Calculate the total value of everything on your list. This is the figure you'll give your insurer. You'll also have to provide them with a list of all your specified items along with their individual values.
- Update your figures from time to time. It's easy to accumulate more and more stuff over time, so don't forget to recalculate how much it's all worth every so often. If Santa brings you a bunch of new camping gear and you've also recently replaced your whole bedroom suite, you'll want to make sure it's all accounted for in your cover. Otherwise you could end up underinsured.
If you haven't already started keeping your receipts, warranty cards, valuation certificates and any other documentation that can prove ownership of your items. These will help out tremendously if you ever need to make a claim.
What happens if you need to claim?
Your insurer will offer instructions on how to claim but generally the process goes like this:
- Contact your insurer. If your stuff is damaged, destroyed or stolen and you think you're covered, email or phone the insurer as soon as possible.
- Fill out your claim form. You can usually find your insurer's claim form online or ask them to send you one. Fill this out along with details about what happened and exactly what items were damaged.
- Provide evidence where possible. Your insurer may want to see proof that you actually owned the items you are claiming for. Receipts, warranty cards and valuation certificates work well but you can even use photos of the damaged items or photos of you with the items prior to the event.
- Cooperate with the insurer. Being honest with the insurer and giving them all the information they need will go a long way in speeding up your claim.
- Get reimbursed. If your claim is approved, your insurer will organise repairs, pay you the value of the items lost, send you replacement items/gift cards for those items or some combination of these depending on the type of damage that occurred.
Does renters insurance cover damage caused by pets?
Renters insurance usually doesn't cover damage caused by your pets. However, some insurers will offer a pet add-on that will cover pet damage and much more. Here is what the typical pet add-on will cover:
- Accidental damage caused by your pet. This covers you if your pet knocks something over and breaks it but not if it damages something by clawing, chewing, urinating or defecating on it. Don't get this confused with another optional feature: accident cover. Accident cover protects you if you or another person accidentally breaks something but this doesn't include your pet.
- Accident injury to your pet. This pays up to a certain amount on your vet bills (usually up to $2,000 or so) if your pet is injured in an accident, for example your dog is hit by a passing car or is bitten by a snake. It doesn't cover illnesses.
- Boarding costs. If your home is damaged or destroyed by an event listed in your policy (like flood, storm or escaping water) and it's too dangerous for your pet to live there, this benefit will pay reasonable costs for you to board your pet, including transportation costs, until it can return.
How is renters insurance treated in each state?
Renters insurance works the same wherever you are in Australia except one small exception. In New South Wales, the wall paint and wallpaper in a unit are legally considered contents and not part of the building.
That means if you spend a small fortune on paint and wallpaper to design a Disney-themed nursery for your child and it gets destroyed by a leak, you'd be covered for those materials in NSW but not in VIC, QLD or anywhere else. The owner's building insurance may cover it but you would have to take it up with them.
The only other area that may have an effect on your insurance is pets. Each state sets its own laws about whether or not the landlord can bar you from having a pet.
In a state where the landlord has more wiggle room, you may find that they require you to take out contents insurance to protect contents they own inside of the home, like linoleum, floating wooden floors, air conditioners, wall paint and wallpaper.
Here are the laws surrounding pets in each state:
Landlords have the right to bar pets as long as it's written into the rental agreement. In this case, you may be able to sweet-talk them into letting you keep a pet by promising to take out contents insurance that covers pets.
Currently, landlords can bar you from having a pet by including a "no-pet" clause in your contract. However, new reforms that come into effect on 1 July 2020 will shift the power back to the tenant.
At that point you'll need the landlord's written permission to keep a pet, but they won't be able to deny you without approval from the Victorian Civil and Administrative Tribunal.
Either way, a promise to take out contents insurance covering pets could go a long way toward softening the landlord's stance.
You need a landlord's written approval to keep a pet on the property. So when you approach the landlord to make the request, it might be a good idea to also promise to get contents cover for pets.
You can't keep a pet in the rental home unless you have the landlord's written permission first. If you offering to get renters insurance that covers pets, you might increase your chances of getting approved.
In WA, you need the landlord's permission to keep a pet AND they're allowed to charge you a "pet bond" of up to $260 in addition to your rental bond.
Although the bond can be considered a form of "insurance" for the landlord, consider putting them further at ease by promising to take out renters pet cover. That should put you at ease too, because the insurance will cover any damage, increasing your chances of getting the bond back!
Who offers renters insurance in Australia?
Here are some insurers that offer renters insurance in Australia:
Some other questions you may have about insurance for rental homes
Get the latest home insurance news