Do I Need Contents Insurance as a Tenant?

As a renter, your personal belongings are invaluable. Landlord insurance is designed to protect property investors who lease out their strata units or apartments and covers the unique risks associated with rental properties, including damage caused by tenants, loss of rental income, and liability claims. As a renter, landlord insurance does not cover your personal property including furniture, clothing, and electronics. So, if a burglary, fire, or accidental damage occurs, you could be left to cover the cost of replacing these items out of your own pocket. This is where contents insurance may help.

Below, we’ll talk about the importance of contents insurance, what it covers, and how it can help protect you as a tenant/renter.

Importance of Contents Insurance for Tenants

Contents insurance is designed to protect your personal belongings inside your rental property. If these items are stolen or damaged, you could file a claim to cover the cost of their repair or replacement– giving you peace of mind that you’re covered no matter what happens.

Unlike landlord insurance which covers the property structure and landlords possessions, contents insurance is designed to protect the personal items you own. This includes personal belongings both inside and outside* the home.

*Some items are automatically included outside the home up to pre-determined sub-limits, with greater levels of cover available under our Premier Cover or alternatively, our optional Specified Portables cover (Please check the PDS. for full details).

Consider scenarios such as a burglary, where your laptop is stolen, or in the event of a water leak that leaves your furniture damaged. Without contents insurance, replacing these items can be extremely costly, leaving you with a financial burden that can take months to recover from.

What Does Contents Insurance Cover?

Basic Coverage

Contents insurance covers the cost of replacing or repairing your personal possessions inside the rental property. This includes:

Household goods
Electronic items
Furniture and furnishings
Floor coverings
Internal blinds, curtains
Relocatable light fixtures
White goods
Clothing and other personal effects
Children’s toys
Specified contents
High risk items

All these items are included up to pre-determined sub-limits, with these limits dependent on the level of cover you select.

Exclusions and Limitations

The coverage provided by your contents insurance typically depends on the level of cover you choose. The higher the level, the more events and belongings you'll be protected against.

There may also be certain exclusions. For example, high-value items like jewellery, artwork, or collectibles may have coverage limits. In this case, you may need to purchase additional coverage for specific or high-value items.

Additionally, intentional damage or wear and tear is generally not covered by contents insurance.

For a full list of exclusions you can read the PDS.

How Contents Insurance Differs from Strata Insurance

Strata insurance policies typically cover the structure of the property itself and common structures such as hallways, lobby’s fences, driveways and garages. Contents insurance covers the possessions within your home, such as your furniture and household items.

Landlord’s Insurance vs Tenant’s Contents Insurance

Landlord’s Coverage:

Landlord insurance is tailored to safeguard property investors who lease out their strata units or apartments. Unlike standard home insurance, it addresses the specific risks of rental properties, such as tenant-caused damage, loss of rental income, and liability claims. This coverage offers protection, ensuring landlords are financially secure against unexpected events that could affect their investment properties. As a tenant landlord insurance does not cover your personal belongings within the property.

Tenants Responsibility for Personal Belongings:

Because landlord’s insurance doesn’t cover your personal belongings, it’s your responsibility as a tenant to secure contents insurance to safeguard your items. If your items are stolen or damaged, the landlord’s insurance policy won’t cover the loss. Taking out contents insurance ensures that your belongings are protected and that you can claim for their loss or damage, providing peace of mind in the event of a fire, storm, theft, or accident.

Risks Faced by Tenants

Common Risks:

Fire: Whether caused by a bushfire or an electrical fault, tenants are at risk of losing valuable possessions in a fire.
Water Damage: Heavy rain or a plumbing issue may cause water entry intoyour property, potentially damaging your possessions.
Storm damage: Extreme weather events such as a storm or cyclone can cause significant damage to your contents.
Theft: A break-in can occur at any time, leaving you with significant loss.
Accidental damage: Whether it’s spilling coffee on your laptop or children’s toys being thrown through the TV screen, accidents can happen when you least expect it.
Liability: If a guest is injured while visiting you in your rental property, contents insurance may also provide liability protection.

Liability Coverage:

Many contents insurance policies also include liability coverage. This protects you from the legal and financial costs if a guest is injured in your home or if you accidentally damage someone else’s property.

How to Choose the Right Contents Insurance Policy

If you live in a strata property you should consider the following when deciding on what policy you need:

A policy that covers your risks: Choose a policy that covers all the likely risks you face as a tenant. For example, if you live in a flood-prone area, ensure your policy covers for damage from flooding.
Coverage limits: Ensure the policy covers the full value of your belongings.
Exclusions: Look for exclusions that aren't covered in the policy and ensure these won’t affect you.
Customer service: Choose an insurer with a good reputation and easy claims process.
The right extras: There’s a range of extras that may be included in your policy or that you can add on. Liability and cover for sporting goods are popular examples.

Recap of Key Points About Contents Insurance

Contents Insurance is essential for tenants: As a tenant, your personal belongings aren’t covered under the landlord’s insurance. So, if you want your valuable items covered in an unexpected event, you’ll need to take out contents insurance.
It can save you from financial losses: While contents insurance is an additional expense, it can save you a lot of money if your items are stolen, damaged, or lost. Without this insurance, you would have to pay for the repair and replacement of these items from your own pocket.
It’s best to be prepared: While renting, accidents can happen. Whether it’s a natural disaster like a flood or fire, or, your property is broken into, it’s best to have peace of mind that your belongings are protected in such events.

As a tenant, protecting your personal property is your responsibility. Many people mistakenly assume that a landlord’s insurance covers everythingf. By taking out contents insurance, your belongings will be covered in the event of a natural disaster, theft, or accident.

Contents insurance is a great investment for tenants and there are many reasons why someone would benefit from it. Whether you live in a flood or fire-prone area or are concerned about the risk of break-ins, contents insurance ensures you won’t be left financially vulnerable if something does happen to your possessions. While it may feel like an added expense, the small premium you pay is a fraction of what it could cost to replace your possessions out of pocket.

Protect your belongings today – get a contents insurance for strata quote tailored for renters.