Renters insurance is a form of insurance that protects renter’s belongings when they are living in your property. As a renter, he/she will not be covered by your landlord’s insurance policy, which only covers what the landlord actually owns — the property.


Don’t make the mistake of assuming they are covered by your landlord’s insurance policy, which will not cover their electronics, furniture, clothing, personal belongings, and other possessions. Tenant insurance is an affordable way to protect what renter own.


How Does Renters Insurance Work?

A landlord’s insurance policy protects against damage or loss to the building, but tenants will be responsible for their own possessions if something happens. When disasters strike, it is often tenants who suffer the greatest loss and miss out on compensation. This is why renters insurance is so important.

Renters insurance works by protecting against financial loss from risks like burglary, fire, and accidental damage to the fittings and fixtures of the building. It also provides financial protection against legal liability.


What Does Renter Insurance Cover?

Renters insurance protects them against many risks that can cause damage or loss of your property as well as legal risks they may face as a tenant.


The following are standard forms of coverage with tenant insurance:

  • Cost to replace or repair lost or damaged items due to covered events. This typically includes storm, rainwater, burglary, theft, lightning, fire, impact, and escaping liquid.
  • Accidental damage to any building fixtures or fittings that they are responsible for under their leases.
  • Temporary accommodations for you and pets if your rental home is unfit for living due to damage or loss of property or contents
  • Removal and disposal of damaged contents plus storage of undamaged contents during repairs
  • Spoilage of perishable food due to a covered peril
  • Replacement of locks after keys are stolen
  • Legal liability for the injury or death of someone else or the loss or damage of the property after an accident at your home when you are liable
  • Contents damaged or lost during a move

In exchange for a higher premium, renters can typically customize the policy with optional benefits such as:

  • Accidental damage to their belongings. This covers renters if they spill a drink on a laptop or drop the phone in the sink, for example.
  • Motor burnout, which covers renters if a power surge burns out a motor in an electrical appliance they own. This coverage can also pay for spoiled food and medication due to motor failure.
  • Flood cover, which covers for losses and damage to their possessions by a flooding body of water. Note that this type of cover is mandatory with most insurance policies today.
  • Portable valuables cover, which covers portable items like jewellery, cameras, laptops, and bicycles they take out of your home
  • Specified valuables can be included in your policy with a higher coverage amount

What Does Renters Insurance Not Cover?

Unless they choose optional upgrades to the policy, renters insurance will not cover high-value items, accidental damage to their possessions, flood damage, portable items outside of your home, and motor burnout. There will likely be a number of events that will be excluded from coverage, such as “actions of the sea” including tidal waves and storm surges.


Why your Renters Need Tenant Insurances?

Unfortunately, it’s estimated that 74% of Australian tenants do not have tenant cover compared with just 7% of homeowners, even though renters are twice as likely to need to make an insurance claim for burglary or theft.


Think you can get by without renters insurance? Consider these benefits:

  • Renters insurance usually costs around $10 per week for $25,000 or more in coverage.
  • A landlord is not responsible for covering the costs if something happens like a fire, flood, or burglary.
  • Only renters insurance will cover renter’s belongings, not landlord’s policy
  • Their belongings are more valuable than you may think. The average tenant who moves right out of the family home has $15,000 in belongings, but this can quickly increase in value.
  • Renter insurance protects them against the greatest threats to their belongings, including fire, burglary, theft, and storms.
  • They can customize their policies with different levels of coverage to meet their needs.


So, it’s a good idea for renters if they live in someone else’s home, including a shared home, there is no better or easier way to protect their belongings than with renters insurance.


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