5 step tenants guide to choosing renters insurance

By Polly Fleeting ·

When you first move into a rental property, one of the first questions you may ask yourself as a tenant is ‘do I need renters insurance?’ 

The truth is, it’s up to you whether or not you opt to take out a policy because it’s not compulsory that you do. But if you are looking for cover, it’s important to familiarise yourself with the options out there. 

What is renters insurance? 

Renters insurance (or sometimes referred to as contents-only insurance) is a policy tenants of a rental property can take out to protect their belongings like electronics, furniture, personal items and more.  

It can protect them from reaching for their wallets and forking out their own cash to cover the cost of damage or loss of items due to an incident like a break-in or a disaster such as a fire.   

So, is renters insurance the same as home and contents insurance?

Home and contents insurance is designed for property owners, so if you are a renter it’s not required for you to insure the building you live in, that’s up to your landlord. 

Generally speaking, owners of rental properties take out landlord’s insurance or building-only insurance, meaning any of the stuff you own inside the home isn’t protected under that same policy. 

That's where renters insurance comes in.

Depending on your renter’s insurance policy, you may be covered for property theft and damage, as well as additional things like temporary accommodation if you can no longer live at your rental property as a result of extensive damage. 

Bear in mind, because renter’s insurance can sometimes be the same as contents-only insurance with certain insurers, it’s important to identify that you are a tenant rather than the owner of the property you live in, when you request a quote.  

But how do you find the right renters insurance policy for you? Take a walk through these five simple steps… 

Step 1: Figure out what type of renter’s insurance you need 

The most basic form of renters insurance is contents insurance which covers your belongings inside your home in the case of theft or damage due to events like a fire or storm. In some cases, outdoor items are covered automatically, while in others it may be an optional extra, so it’s worth checking the insurance policy’s PDS to clarify. 

And while we are on the topic of additional cover, there are also a bunch of extras that you may need to consider adding to your policy when you take out renters insurance. Some of these include: 

  • High-value contents cover: For expensive items above a certain price bracket (such as jewellery, furniture or art pieces within the home). 
  • Portable contents cover: For items that you take to and from home, such as a laptop or phone, so that they are covered both when they are inside the property and outside it. 
  • Accidental damage cover: This covers damage you or your family may cause to your belongings unintentionally, like accidentally knocking an artwork off the wall or smashing a valuable vase.    

Just remember, the items you own might add up to be worth more than you think, so ensure you’ve crunched the numbers properly rather than just having a guess at what cover you think you’ll need. 

Can I get renters insurance if I live in a sharehouse? 

If you are a tenant in a sharehouse, getting cover may be a little tricky if you are just looking to insure what’s in your bedroom or specific items within your house. It may be worth discussing whether your roommates want to chip in for a policy with you that covers everything. This is because if you take out a policy where only your possessions are named, you may not be covered if a roommate who’s not on the policy damages or steals any of those items.

Step 2: Check to see which belongings are covered under renters insurance 

Generally, when it comes to renters insurance - if you own it, you can insure it. So don’t be shy when it comes to naming items you want to have on your policy. 
Some renter’s insurance includes large items like furniture, appliances, bicycles and TVs to smaller items like jewellery, clothing, tools and even children’s toys. 

The catch with contents insurance however, is that providers tend to place limits on the amount you can claim for each item, where up to $1,000, $2,000 or $3,000 per item is typical. So, if you do own pricey items, as mentioned above, it may be worth considering adding on high-value items cover.

It’s also important to check what exclusions certain insurers have when it comes to renters insurance. An example of this could be any ‘home office’ items that are used from within your rental property to run a business. Make sure you go through the PDS with a fine-tooth comb before sealing the deal, so you’re not left trying to make a claim on an item that didn’t qualify under your policy. 

Step 3: Read up on what type of events are covered under renters insurance

Unless you own a crystal ball, it’s impossible to know what events may occur to the property you live in, but that’s the beauty of the safety blanket that is renters insurance. 

While there tends to be slight differences between what’s covered by various insurers, here are some of the typical events that you may be protected against as a tenant under renters insurance: 

Usually includedCan be an optional extra
TheftFlood
VandalismAccidents caused by you or family member (such as accidentally breaking a vase)
FireDamage caused by pets
StormLegal liability protection (if a guest hurts themselves in the property you live in)
ExplosionTemporary accommodation (if the property becomes unliveable as a result of an insured event)
Sudden Impact (such as damage from a fallen tree or electricity pole)Lock replacement
EarthquakesOutdoor items
Damage caused by wild animalsMotor burnouts (if appliance under 7 years old burns out or fuses)
Water leakageRefrigerated food and medicine spoilage (if your fridge is damaged as a result of an insured event)

Hot tip: If you are unsure about whether or not a specific event is covered under the policy you intend to take out, check the insurer’s PDS (which is generally found on the provider’s website) or get in contact with them directly. 

Step 4: Compare the costs of renters insurance policies 

Whether you are looking for low premiums, a high level of cover or a variety of optional extras, how much value you get out of what you pay should be at the forefront of your mind when you compare renters insurance policies. 

There are a handful of things that insurers take into consideration that may affect the cost of your renters insurance premium. 

The biggest factor that affects your premium is the amount of cover you wish to take out and whether you opt for additional extras. However, it can also be impacted by other things like the location of the property (whether you live in an area that is prone to natural disasters like floods or bushfires, or your suburb’s crime rate) and the amount of security on your home (such as deadlocks, bars or CCTV). 

Also remember that there may be ways to save on your premium, such as buying your policy online or paying an annual premium instead of monthly. So, it’s also a good idea to compare discounts between providers as well - you never know whether you might snag the best offer. 

Step 5: Find out the nitty gritty about making a claim on renters insurance 

Before you sign on the dotted line, it may be worth doing some digging into what it might look like if you were to make a claim on the renter’s insurance policy you are considering. 

What might your excess be? How simple is the claims process? What sort of documentation do you need to provide? How long is the process? 

It’s also important to think about how you may be compensated by your insurer in the case that any of your belongings are damaged or stolen. For example, some providers offer a new replacement for insured items, while others simply cover the replacement value, which depreciates the longer you own the item.  

Here is the typical process for making a claim on renters insurance:

1. Get in touch with your insurer: this could be online, via email, over the phone or in person. 

2. Fill our a claims form: these are usually found online or can be requested from your insurer - make sure you fill out all of your details correctly and truthfully. 

3. Provide evidence if you can: this may be in the form of receipts, warrant cards, valuation documents or even photos. 

4. Receive compensation: if your claim gets approved, you will be reimbursed. This may be through repairs, replacement, gift cards or money.  

Ready to start checking out insurance policies? Why not jump over to our home insurance comparison table for a bunch of hot options!

Polly Fleeting
Polly Fleeting
Money writer

Polly Fleeting is a personal finance writer here at Mozo, specialising in loans and credit cards. Her work is aimed at helping people find ways to make smart product choices, reduce debt and get more for their hard-earned dollars. Polly has a degree in Journalism from the University of Technology, Sydney.