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Reports in recent years have indicated that up to three-quarters of Australian renters do not insure their household belongings.

In an increasingly competitive real estate environment, many Australians are opting for urban living and a lease rather than outer-suburban home ownership. This allows for all kinds of freedoms from the responsibilities of home ownership, but some renters are forgetting one of life’s biggest necessities.

Reports in recent years have indicated that up to three-quarters of Australian renters do not insure their household belongings.

Here are a few things you need to know about the value of insurance for tenants.

Your landlord’s insurance doesn’t cover everything

Many renters mistakenly believe that the landlord is responsible for any damage to their property or loss of their belongings. And when disaster strikes, too many tenants are left in strife with no compensation.

If damage occurs to the property that is outside a tenant’s control, like a natural disaster, the owner should generally arrange for the repairs to the property. But that doesn’t mean you shouldn’t protect your household items while you’re renting.

You need to know how to protect your belongings

Contents insurance allows you to protect your furnishings, clothing, electronics and other household items against loss, theft or damage.

If, in a worst-case scenario, there is a fire or a flood and you lose all your personal possessions, contents insurance can help compensate you.

For most insurers, the minimum level of cover for contents is around $20,000. At first you might find that figure seems excessive but a simple look in your closet and walk around your home is enough to make you realise how much it would cost you to replace all your possessions.

Add up the value of your items of clothing, your electronics, artwork, jewellery and your furniture. It doesn’t take much to hit that number and realise just how financially devastating it would be to restock your home all at once.

Theft is one of the biggest reasons for insurance claims and the Australian Bureau of Statistics recently found that there have been increases in all three property crime offence categories in Victoria, Western Australia, Tasmania and the Australian Capital Territory.

Thieves are becoming even more savvy with the advances in technology and the rise of social media providing clues as to when you aren’t around to defend your household items.

Most people don’t like to think about this unpleasant experience, or they may consider it unlikely, but that’s exactly why you should prepare for it.

How to pick the right policy for you

With all these factors in mind, it’s essential to choose the appropriate insurance coverage that’s right for you. There are so many relevant considerations, but some of them are listed below.

·         Make sure you analyse the right amount of coverage for your situation and investigate different policies that could work for you.

·         It’s wise to check your insurer’s definition of valuables because this can vary widely. Then you should check the single article limit (which is the most the insurer will pay out in the event of a claim for each item). So, if you have any valuables worth more than the single article limit, you need to tell your insurer about them and you may need to pay extra to have them insured.

·         With some contents policies, you’ll be covered for the things you take out of the home such as your phone, laptop or sports equipment. However, you need to check that you have the cover you need. And you should be sure to get enough cover to replace all your possessions.

·         You should choose an excess you’d be happy to pay if something happened tomorrow.

·         If you haven’t been keeping record of all your major purchases, don’t look for policies that require nearly impossible proof of ownership.

We hope this advice is helpful for you in securing quality home contents insurance, and we hope that you never need to use it!

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