Top 5 Contents Insurance FAQs for Australian Renters and Strata Owners

1. Do I really need contents insurance as a renter?

Yes, contents insurance is helpful even if you rent. Your landlord's insurance only covers the building structure, not your personal belongings. It's easy to underestimate the value of your items around the home simply because you didn't break the bank to buy a pair of jeans or a toaster. But over time, the total value of your possessions is likely to add up to more than you can afford to replace in one hit. Think laptops, smartphones, gaming consoles, furniture, clothes, and kitchen appliances – these items can easily total $25,000-$50,000 or more.

2. What does contents insurance actually cover?

Contents insurance will cover just about anything in your house that isn't bolted down, including furniture, electronics, clothing, and appliances. Coverage extends to common events like fire, flood, storm damage, theft, vandalism, and accidental breakage. Most policies also include legal liability protection (typically $20 million), which can protect you if you accidentally damage your rental property or cause injury to others. Some policies offer additional benefits like temporary accommodation costs, cover for belongings away from home, and protection for visitors' contents.

3. How much does contents insurance cost and how can I save money?

The average annual premium ranges from around $200-$900 depending on your location and coverage level. However, significant savings are possible. A renter with contents insured for just over $50,000 could save up to $300 a year in Victoria, $750 in Queensland and $635 in NSW simply by switching insurers. Key money-saving strategies include shopping around annually (avoid the loyalty penalty), increasing your excess, choosing basic rather than premium coverage, and looking for discounts like annual payment discounts or combined policy savings.

4. Am I covered if I accidentally damage my rental property?

This depends on your specific policy. Not all contents insurance policies cover a tenant's accidental damage to a rented home. However, some policies include legal liability cover that protects against accidental damage caused by tenants. This could cover scenarios like an overflowing washing machine damaging flooring or a cooking fire damaging the kitchen. All contents insurance policies come with at least $20 million legal liability cover, and some will protect accidental damage caused by tenants. Always check your policy's Product Disclosure Statement to understand what's included.

5. How do I determine the right sum insured amount?

Your sum insured should reflect the total replacement cost of all your belongings. When you buy a policy you tell the insurer how much it will cost to replace all your belongings – this is called your "sum insured". This is the maximum they'll pay if you lose everything. Create a detailed inventory of your possessions and their replacement values. Many people underestimate this figure, but some insurers offer an underinsurance safety net that will increase your cover by up to 25% if your sum insured isn't high enough to replace all your contents. Remember to update your sum insured when you acquire valuable new items.

By Daniel Graham

By Jodi Bird