The difference between fixed and loose contents

Usually, when you take out a typical home and contents policy, it offers some sort of protection for all the things that come in the house, like furniture, whitegoods, artwork, electronics and valuables. You might think that landlord insurance offers the same deal. However, you would be mistaken…

Don’t get us wrong. Landlord insurance policies do offer some sort of cover for contents. However, the definition of ‘contents’ is a little different to the definition in a home and contents policy.

In many contents-only landlord insurance policies, ‘contents’ refers to things that are temporarily or semi-attached to the property or free-standing items which can be removed such as carpets, curtains and light fixtures. It doesn’t cover general contents like furniture.

NOTE: Items that form part of the building structure like baths and sinks, kitchens, floor and wall tiles, decking and verandahs, toilets and showers, or fences and gates are usually covered by the building insurance policy.

Examples of contents covered in typical contents-only landlord insurance policies are light fittings, curtains, blinds, fitted carpets and floating floorboards. When it comes to strata property, contents may also include wallpaper and any fixture or structure improvement within or attached to your unit which the body corporate is not required by law to insure.

The reason why only certain items are covered is because a landlord insurance policy is designed specifically for rental properties and the risks they are most likely to face. The reality is that the vast majority (around 90 per cent) of rentals are leased unfurnished. This means the landlord is only providing minimal (usually fixed) contents at the property – the tenant brings everything else (furniture, appliances and the rest). And, as the insurance is only intended to cover the landlord’s property, only the temporarily or semi-attached items that they provide at the property for the tenancy are insured.

A word about short-stay accommodation: When it comes to properties rented short-term like serviced apartments, or homes leased via an accommodation platform like Airbnb, ‘contents’ may extend to include household items under a specialist policy like RentCover ShortTerm.

Now, of course, not every rental property is offered as unfurnished, and this is where non-fixed or ‘loose’ contents cover comes in.

Loose item cover is designed to protect the contents the landlord provides for tenant use at the rental beyond the usual items that we have mentioned above. This could range from providing a few basics like a washing machine, TV or lounge, to a fully kitted out home with everything that someone would need to live there.

So, if the rental is partially or fully-furnished, the landlord should consider extending their coverage to protect these items. If you are not sure if you need loose contents cover, think about what would happen if you could turn the property upside down and shake it… Everything that is displaced is probably considered loose contents. So as the lamps and couches are likely to have moved, they would be loose contents. Meanwhile, the built-in cupboards would still be attached, so they are likely to be considered part of the building (but a free-standing wardrobe that fell out would be loose contents).

Cover for loose items is automatically included in our Householders Rental, RentCover Ultra and RentCover Platinum policies from insured events up to the sum insured. However, if you require it for tenant damage (accidental, malicious or theft) then it is not covered and you need to request cover (up to $70,000 in RentCover policies).

You must apply to have loose items covered when taking out, updating or renewing your landlord insurance policy with EBM RentCover. If you do not advise that you need loose item cover, your contents policy will likely only cover the temporarily or semi-attached items as outlined in the policy.

It is important to remember that landlord insurance only covers the landlord’s contents at the rental. It does not cover the tenant’s possessions. For a tenant’s personal property to be covered, they require their own renters’ contents insurance.

To ensure your investment property is properly covered, be sure to understand the options when it comes to insuring contents. If you have questions about what contents cover you need for your rental property, have a chat to a member of our Expert Care team.