The top reasons you need tenants insurance

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.  

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.

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.

*While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you need us we are there, contact 1800 661 662 if you have any questions.