If you’re among the almost one-third of Aussie households that are renting their home,1 you might be wondering how home insurance works for you. Do renters need home insurance? After all, your landlord insures the building, right?
While it’s true that your landlord will likely have insurance that covers the rental property itself, plus the fittings and any furniture they own,2 this doesn’t protect anything on the property belonging to you.
Not having suitable contents insurance – sometimes known as renter’s insurance – could leave you facing hefty costs in case of an event such as theft, fire, flood, earthquake or even a tree falling on your home and damaging your belongings.2
Let’s explore what typically is – and isn’t – covered by renter’s insurance and answer some of the questions you might find yourself asking when choosing the cover that’s right for you.
What does renter’s insurance cover?
Renter’s insurance is essentially contents insurance for people who are tenants in their homes.3 Depending on your policy, it may cover items that belong to you, such as clothes, furniture, computers, appliances like your fridge, television and washing machine, as well as more expensive items such as jewellery.4
It generally doesn’t include cover for cars or pets,3 which have their own insurance categories.
If any of your covered items are damaged or lost in an insured event, as stated by your policy, your insurer may repair or replace the items, or pay you the replacement value for the item.4
Youi’s Contents insurance covers policyholders for loss or damage caused by theft, earthquake, fire, flood, storm, and impact – that is, items damaged or lost due to your home being hit by a falling tree or a car, for example.5
Other insured events that might also be of interest to renters include:5
- Intentional damage, which is loss or damage to your belongings caused by a person not invited onto the premises
- Temporary accommodation for up to one month if you’re unable to live at the premises after an insured event
- Up to $1,000 cover for loss or damage to items belonging to friends who are visiting or staying with you if caused by an insured event and the claim is accepted.
- Loss or damage caused by escaping water.5
What optional inclusions can renters add to their contents insurance?
Everyone’s situation is unique, and we understand that some renters might want additional cover. Here are some of the things Youi’s optional covers include.5
Contents in commercial storage
If your current rental is on the small side, you might be using a commercial storage facility to house some of your belongings. This optional inclusion protects contents in commercial storage up to the value of $20,000 against loss or damage caused by certain insured events.5
Accidental loss or damage – away from home
Many of us have hobbies that involve expensive equipment that is used away from home – think cameras, surfboards, laptops or golf clubs. This optional cover helps protect items against accidental loss or damage, including theft, even when they’re not at your rental property.5
Business items
Whatever your line of work, it’s pretty tough trying to run a business if you’re suddenly without the equipment you need to do your job. With this optional inclusion, business items are covered for up to $5,000 if they’re lost or damaged as the result of an insured event worldwide.5
Pet injury
If your cat or dog is injured due to an accident, this optional cover provides up to $1,000 towards vet fees.5
What is not covered by renter’s contents insurance?
The most obvious thing that renter’s contents insurance won’t cover is damage to the building you live in. That can be covered by the building insurance your landlord is likely to have.2
Additionally, it is highly unlikely to cover the cost of your rent if you lose your job and are unable to pay it.2
You might also want to check any policy you’re considering to see if it covers jewellery. If it’s not automatically included in the policy, you may need to add your precious items separately.6
Policies tend to have two options for jewellery:6
- Unspecified – this is when you include your jewellery along with all other contents. Your insurer may cap the amount they’ll pay out for unspecified items of jewellery.
- Specified – this is when your jewellery is covered for an amount set by you. People tend to use this option for their most valuable pieces.6
Remember, items such as bikes, golf clubs and cameras that you often use away from home may not be covered for loss or damage that occurs outside your rental property if you haven’t opted for a cover like optional accidental loss or damage away from home.
Insurance for renters: what's covered and what's not?
Personal belongings like computers, laptops, phones and TVs can be covered by contents insurance.
Broken windows probably fall under your landlord’s building insurance, not your contents insurance.
If the couch is yours, it will likely be covered by contents insurance. If it’s your landlord’s, they may have insurance for that.
Your favourite jeans are covered by contents insurance, along with the rest of your clothes.
Who should consider renter’s insurance?
Anyone who is a tenant might consider rental insurance, but it may not be something that’s a good fit for everyone. If any of the following situations describe you, you might consider contents cover:
- You’ve moved out of home into a rental for the first time.
- You’ve moved in with a partner at their rental and they don’t already have contents cover.
- You’ve picked up a long-term housesitting gig.
- You’re in a rental while renovations are being done on your primary home.
- You’re in a long-term rental with your family.
How much is contents insurance for renters?
The amount renters pay for contents insurance can vary quite a bit depending on factors such as where you live, how much coverage you need and your claims history.2
But there are steps you can take to reduce the cost. CHOICE suggests considering the following:7
- Get the right cover: Check that any policy you’re considering doesn’t include additional features that you don’t need.
- Up your excess: A higher excess can mean a lower premium. You could check with your insurer to see how much a higher excess might save you – just remember, this will impact the amount you’ll receive in case of a claim.
How much should I insure my belongings for?
Accurately estimating the value of your possessions is crucial to making sure you’re properly covered.2 Being underinsured could leave you out of pocket if you do suffer loss or damage to your contents and need to make a claim.
Making an inventory of your belongings room by room is a good start. It might also be wise to take photos of your belongings on your phone and store receipts for any significant purchases.2
An online contents calculator, like the one from the Insurance Council of Australia, could be a good starting point to get a general idea of the value to insure your contents for.8
Understanding legal liability for renters
Contents insurance, including policies held by renters, typically includes $20 million in legal liability cover.3 If you damage someone else’s property or cause their death or injury, this goes towards your legal costs and any compensation.
Youi’s tenant’s liability also covers renters against loss or damage to the landlord’s fitted carpets, fixtures and fittings as a result of an insured event, up to 10% of the contents sum insured amount.5
Now you know how insurance can protect your precious belongings while you're living in a rental property. To find out more about our coverage, consider starting a quote with Youi today.
1 Source: Australian Bureau of Statistics – Housing, May 2022
2 Source: Canstar – What is renters insurance?
3 Source: CHOICE – How to buy the right contents insurance for renters, March 2024
4 Source: Moneysmart – Contents insurance
5 See our Home & Contents PDS for full details.
6 Source: CHOICE – Home and contents insurance cover for jewellery, April 2024
7 Source: CHOICE – The top five ways to save money on your renters contents insurance, March 2024
8 Source: Insurance Council of Australia – Calculators
