Contents insurance

Protecting the things that matter

Whether you own or rent your home, it's important to take out insurance to cover the cost of replacing or repairing your household items and possessions if they are damaged, lost or stolen.

Here we explain what these policies cover, and how to choose the right one for you. 

What is contents insurance? 

Contents insurance covers the personal possessions you have in your home if they are damaged, lost or stolen. It can include things like furniture, clothes, computers, fridges, electrical equipment, tools, and jewellery.

Homeowners usually combine their contents insurance policy with home insurance into a single home and contents policy. If you are renting your home, it's important to insure your belongings because landlord insurance will only cover the property the landlord owns - your things are not included.

How much should you insure contents for? 

When thinking about how much contents insurance you need, start by listing all your belongings and working out what it would cost to replace them. A good way to do this is by going room by room and taking photos of what you own - you may be surprised by how much you have. 

Smart tip

Keep receipts of household goods for proof of ownership. 

You may want to set up an online inventory of these details which can be stored away from your home. The  Insure it, it's worth it guide from Good Shepherd Microfinance has a list of common household items, and their average value, to help get you started. 

The Insurance Council of Australia's website, Understand Insurance, also has an online contents insurance calculator to help work out the value of your possessions.

Types of contents insurance

The type of cover you choose will affect the premium you pay. Some policies cover you for defined events (e.g. burglary and fire) while others cover you for any accidental event. Others give you only limited cover if you take an item (e.g. a laptop) outside your home.

There are two main types of contents insurance:

  • policies that cover the value of your belongings
  • policies that replace your belongings with new items e.g. 'new for old'. 

You can save money on contents insurance by choosing a higher excess. For example, if you can pay the first $1,000 of any loss, the insurance premium will be cheaper.

Case study: Alina and Daniel are burgled

Young couple purchasing contents insurance online

Alina and Daniel moved into a small apartment near the city. They decided to get contents insurance even though their building had a security system.

Two months later, their apartment was burgled. They lost Alina's laptop and some expensive camera equipment. Although the couple was very upset, they were glad they had taken the time to get the right cover. Alina's laptop was replaced and they were compensated for the camera equipment.

Contents insurance for people on low incomes

No matter how much you earn, if your possessions are important to you, you need to protect them. It's especially important to insure your belongings if you are on a low income and wouldn't have the money to replace them if they were stolen or destroyed.

Good Shepherd Microfinance has worked with insurance companies to create affordable and simple insurance policies. You can choose between insuring contents that are worth between $10,000 and $20,000, or you can insure a single item (like a fridge or television). These policies have flexible payments options and some premiums can even be deducted from Centrelink benefits.

Find out more about the Good Insurance program on the Good Shepherd Microfinance website.

Insuring special collections or jewellery

Most contents policies ask you to declare 'collections' separately. A collection can be artwork, stamps or memorabilia, for example. Ask your insurer what can be identified as a 'collection'.

If you don't declare your collections, you may not be able to claim the full amount of your loss if they are stolen or damaged.

Most policies also only provide limited cover for valuables such as jewellery. You may need extra cover to adequately insure these types of items.

Paying out contents insurance claims

Contact your insurer immediately if you want to make a claim on your policy. You may be able to do this by phone, but sometimes you will be asked to complete a claim form.

Tell the truth and include as many details as possible of the incident. Keep and provide all documents supporting your claim.

Some insurers may offer alternative ways of settling. For example, they may:

  • repair or replace the goods
  • pay you the cost of repairing or replacing the goods
  • give you a cash settlement
  • give you a gift card.

Whether you own or rent your home, contents insurance gives you peace of mind that your most precious possessions are covered for loss or damage.

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Last updated: 18 Feb 2019