Do you need home renters’ insurance?

If you live in a rental property, you shouldn’t need to worry about home insurance, as that responsibility falls on your landlord. But you may want to consider protecting the possessions you keep inside your home.

Home renters’ insurance is a type of contents insurance specifically for renters. It doesn’t cover the home itself, but it does offer protection for personal items such as your furniture and valuables.

If your possessions are damaged or stolen in an unexpected event such as a flood, fire, or break-in, being covered by a contents insurance policy could help you with the cost of replacing them.

Choosing not to take out contents insurance, on the other hand, would mean paying out of your own pocket to replace your stolen or damaged goods, as any home insurance policy your landlord holds would only cover damage to the home itself.

What does home renters’ insurance cover?

Coverage for your belongings can differ depending on the insurance provider you take out a policy with and the type of policy you choose, but most will cover the following categories:

• Furniture
• Electronics
• Jewellery
• Clothing

Just about everything under your roof should be eligible for coverage. Some policies even cover food spoilage if a weather event causes power failure at your home.

But are items you frequently take with you outside of the home covered? Many insurers offer portable contents insurance as an add-on to a contents insurance policy, to cover valuable items such as photography or music equipment, laptops, and engagement rings.

In terms of the insured events you may be covered for, again, this can differ between insurers, but typically include:

• Theft or attempted theft
• Fire (including bushfire)
• Flooding caused by adverse weather events or plumbing issues
• Earthquake
• Sudden impact (such as a tree falling)

Be sure to confirm exactly what is covered under the policy you’re interested in before you apply. Some policies will cover certain items or events by default, while others may charge extra, and some will have specific exclusions.

How much does home renters’ insurance cost?

The amount you’ll pay for home renters’ insurance, known as the premium, will depend on a range of factors, including: 

• Where you live –Different parts of the country are exposed to different levels of risk when it comes to events such as earthquakes, flood, fire, and theft. If you live in a location that has a high level of risk for one or more covered events, you’ll likely pay a higher premium than lower-risk locations.
• The value of your contents –If you live on your own in a one-bedroom apartment and have a minimalist approach to material belongings, your insurance premium is likely to be much lower than a family of five who live in a two-storey house. Similarly, a tenant with a home full of luxury designer furnishings will likely pay a higher premium than one with mostly thrifted décor.
• Any added extras – Some insurance providers will offer add-ons such as portable contents insurance. If you decide to take advantage of this and have many high value items that you need protection for, it could significantly increase your premium.

In addition, like other types of insurance, you will typically be expected to pay an excess when you make a claim that your insurer approves. Just like your insurance premium, the cost of your excess will generally vary. You may have the option to choose a higher excess, which could help lower the cost of your premiums, though you could find yourself out of pocket if you have to make a claim.

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