Renters insurance vs. contents insurance: What’s the difference?

For anyone looking to protect their belongings, the terms renters insurance and contents insurance may seem familiar. Indeed, both will pop up in an online search when looking for insurance for your personal items.

The terms are often used interchangeably and they are very similar. However, there is an important difference you should know about: while both provide insurance for your valuables, renters insurance is designed specifically for tenants. That is, it covers renters’ personal belongings and furnishings at a leased out property. 

Contents insurance, on the other hand, can also be taken out by homeowners. So, a homeowner can take out building insurance to protect the structures of their property and contents insurance to protect the belongings inside their home.

Some differences between renters and contents insurance

Broadly speaking, renters insurance and contents insurance offer the same cover. One of the only major differences is that some renters insurance policies will offer cover for accidental damage done to any fixtures or fittings in your rental home. An example of this would be if you dented your living room door by accident. 

Providers will also sometimes offer a lower cost version of renters insurance solely offering fire and theft cover. Although this may be a more cost-effective insurance option, it is important to remember that this type of cover is basic, which could leave you vulnerable to underinsurance.

Besides these and a few other nuances, renters and contents insurance are very similar in what they actually cover. Taking out a contents insurance policy as a renter is a perfectly reasonable thing to do, provided it adequately covers your belongings and suits your budget.

What does contents insurance cover?

As mentioned above, both contents and renters insurance provide cover for your personal belongings. This can include items such as:

• Furniture
• Whitegoods
• Electronic equipment, e.g. laptops, computers, TVs
• Clothing
• Jewellery

Covered items will vary from policy to policy, so make sure you double check the inclusions and exclusions before signing on the dotted line. Contents insurance won't protect your valuables if you are negligent, for example, which can include accidentally leaving keys in your door or not staying on top of mould. If you have a particularly pricey item to insure, like a rare potted plant, you may have to take out additional cover.

RELATED: Should renters get flood insurance? Yes! Here's how

Keen to start getting quotes for your prized possessions? Head to Mozo’s compare contents insurance page to see what policies are on offer right now, or check out the deals below.