There are more than 4.5 million renters in Australia and many are the proud owners of expensive items such as computers, mobile phones, televisions, designer clothes, furniture and jewellery. Yet few bother to insure their belongings, possibly leaving themselves exposed to financial hardship if disaster strikes.
Research by the Insurance Council of Australia reveals 74 per cent of renters do not have contents insurance, compared to just seven per cent of homeowners. At the same time, renters are twice as likely to need to make a claim for theft or burglary.
Tossing up whether you really need tenants insurance? Here are the top things to consider to help you make a decision…
The landlord’s insurance covers tenant belongings
Many renters assume their landlord’s insurance will cover their belongings if there is a fire or burglary, but this is not the case. Although the building and the contents owned by the landlord, like carpets, curtains or light-fittings, may be insured by the landlord, cover does not include contents owned by the tenant. A landlord is only responsible for a tenant’s losses if the landlord is found to be negligent in some way and if their action or inaction resulted in the loss.
For a tenant’s possessions to be covered in the event of loss, renters need their own contents insurance (such as TenantCover).
I don’t have anything worth stealing
31 per cent of renters think the value of their belongings is too low to bother with insurance
It is estimated when a person first moves out of the family home into a rental they have about $15,000 worth of possessions. This rapidly climbs as they accumulate more over the years. While some renters are less likely to have the same quantity of furniture or home wares as a homeowner, they are just as likely to own electronic goods (think the i-suite: iPad, iPhones, pods and macs) and personal goods such as clothing, accessories, books, bedding, bikes and jewellery. While many think they have nothing worth stealing and therefore insuring, if their possessions are damaged or stolen, the cost to replace those items quickly adds up.
TIP: Complete an inventory of your household belongings (including electronics, furniture, linen and jewellery) and you may be surprised by the total value of your contents.
I am careful so I don’t need liability insurance
An important factor that many renters fail to appreciate is liability. Although the owner of the property is responsible for ensuring the home is properly maintained and safe, and would be responsible if the tenant or their guest was injured on the premises as a result of negligence, there are times where the responsibility for losses falls to the tenant (known as occupiers’ liability).
A tenant can face liability for damage or injury if they fail to maintain a safe environment for anyone that comes onto the property. Medical costs, lost wages or business earnings, compensation for pain and suffering, and even legal costs can all be awarded to someone injured on a premises – and be footed by the tenant if they are not careful in their duty of care.
It is too expensive
In 2007, we introduced TenantCover to fill a gap in the market for simple, low-cost and practical contents insurance for renters. For as little as $170 a year (or about the cost of a cup of coffee a week), receive up to $25,000 cover for belongings kept on the property. This policy is designed to be an affordable solution, covering the cost of replacing belongings damaged by common risks, such as fire, storm and flood, and includes up to $10 million cover when you are found legally liable for an accident.
Find out more here, or contact our team for more information.
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