Many renters across Australia wrongly assume insurance is something only the landlord has to worry about.
While the owner is responsible for insuring the actual house, unit or apartment a renter lives in, any possessions inside a property should be insured by the tenant themselves.
So, while renters don’t exactly need house insurance when renting, they do need coverage for their stuff via contents insurance, also sometimes called renters’ insurance.
Canstar’s finance expert, Steve Mickenbecker, explains that renters’ insurance is a type of contents insurance designed specifically for people who are renting.
“It works to protect your belongings if they are stolen or damaged due to certain events, like fire and theft. Say someone breaks into the home you’re renting and steals your TV. If you have renters’ insurance, the cost of replacing your TV could be covered,” he says.
Costs and price of renters insurance
He says providers usually consider things such as the insured amount, the security features of the home, the suburb’s crime rate and suburb’s risk to floods and fire which works out premium, ie how much it costs.
So, how much does it cost for a renter to protect themselves? With recent ABS data valuing the contents of an average Aussie home at about $70,000, it’s about $450 a year, but it could be more or less, depending on what is being insured.
As with car insurance, the cost can differ from state to state and even property to property. Premiums are based partially on the specific risks associated with a location. So, for example, homes in a flood-prone area or a postcode with a high crime rate are more costly to insure.
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Does renters insurance differ for apartments and houses?
Different types of rental properties can cost different amounts to insure. “Ground floor apartments may cost more to insure than third-floor apartments that can be less vulnerable to theft,” Mickenbecker says.
Ultimately though, every property and household is different. The value of the possessions will depend on the number of bedrooms, the number of occupants in the house or apartment and the quality of goods.
What does renters’ insurance generally cover?
Renters’ insurance will protect anything that’s not fixed to the walls of a home, including clothes, furniture, jewellery, books and electronics.
Coverage gives renters the funds to replace them if they are destroyed or damaged in a fire or weather event like a flood or storm or if they are stolen or damaged in a break-in. Not all policies are the same though, so it’s good to check the inclusions and exclusions.
Benefits of renter’s insurance
If you’re still trying to decide whether or not renter’s insurance is appropriate for you Mickenbecker lists some of the benefits of taking out insurance as a renter.
1. Financial protection
Financial protection is the number one reason renters should have insurance – either a standard contents policy or renters’ insurance. Mickenbecker says without insurance, a disaster or break-in can be both stressful and costly, potentially leaving renters with a sizable dent in their bank accounts.
2. Peace of mind
The peace of mind that comes with knowing insurance is in place should something go wrong is immeasurable, Mickenbecker says.
3. Legal protection
Depending on the policy, renters’ insurance can also protect tenants against some legal liability. “This means that if someone injures themselves or their possessions at the property you are renting, you could be protected against having to fork out huge legal costs and footing their medical bill,” Mickenbecker says.
Some policies may specifically offer visitors’ belongings cover, which may cover the tenant in circ*mstances where a guest’s belongings are damaged due to certain events, like fire and theft.
4. Temporary accommodation
Some insurance providers also cover the cost of temporary accommodation, which can be a big plus if the property hasbeen damaged so badly it can’t be lived in.
