Whether you own your home or you’re renting, contents insurance provides crucial financial protection for all your most treasured possessions. Our in-depth guide has all the information you need about contents insurance. Read on to find out what to look out for in a policy and what you’ll be covered for.
Contents insurance covers the cost of repairing or replacing your possessions when they are stolen or damaged due to an insured event. It can cover everything from furniture and appliances to clothing, jewellery and even your TV, offering financial protection if any of your items are damaged due to fire, storm, flood, theft and a wide range of other risks.
It’s important to check the fine print to see what kind of cover you have before you buy. It’s common these days for insurers to replace items:
New-for-old which replaces stolen or damaged items, such as TVs, computers and phones, with new equivalent items.
But most will also have exceptions to the rule that are paid out at:
Market-value which replaces possessions such as clothing, cosmetics, footwear, bed linen and curtains for their current market value.
Why do I need it?
If you’re uncertain whether or not contents insurance is worth the expense, take a moment to think about the value of everything you own. Go through each room in your home and list all the items you see – TVs, furniture, white goods, rugs, clothing, beds and everything else.
Once you’ve got a rough idea of the total value of everything you own, think about how you would cope if they were all destroyed, for example if your home burned down in a fire. Would you be able to afford the cost of replacing every single item from scratch?
If the answer is no, this is why you should take out cover. From fire and storm to freak accidents, burst pipes and even burglars, no matter where you live there are several risks that could damage or even destroy your possessions. Having contents insurance in place ensures that you can cope financially in case something ever goes wrong.
What am I covered for?
Contents insurance is designed to cover damage to or loss of the contents of your home. This includes cover for a wide range of items, such as:
Carpets and curtains
Furniture and furnishings
Household goods and appliances
Internal blinds and loose floor coverings
Clothing and personal effects
Swimming pools which are designed to be dismantled and moved
Portable electrical equipment
The best policies will cover your personal possessions against a wide range of events, including:
Storm, hail and lightning
Vandalism or malicious damage
Accidental glass breakage
Water from leaking pipes
Finally, contents insurance also offers a range of additional benefits:
Legal liability cover if you’re held responsible when someone else suffers an injury or property damage
Replacement of locks and keys after theft
Cover for credit card fraud resulting from the loss or theft of credit cards
Cover for contents kept in the open air at your home
Cover for contents belonging to guests
Cover for contents temporarily removed from your insured address
Food spoilage costs
Emergency repairs to your building to prevent further damage to your contents
Cover for damage caused by the burnout of electric motors
Cover for portable valuables while they’re away from home
Does contents insurance cover my personal valuables?
Yes, contents insurance can provide cover for your personal valuables, including items such as jewellery, smartphones, computers, cameras and more. However, it’s important to be aware of any limits that apply to cover – for example, your laptop may be worth $3,000, but your insurer may only pay a maximum benefit of $1,500 for any one item.
Keep an eye out for portable valuables or portable contents insurance, which is included as standard on some policies but available as an extra-cost option on others. This provides cover for those important items you often take with you when you leave home. You can protect them against theft, accidental loss, damage at home or when you’re away from home travelling in New Zealand.
Contents insurance for phones
If you’re looking for cover for your smartphone, computer, camera or other important electrical items, look for a policy that provides cover for portable contents. This ensures that those gadgets you take with you anywhere you go are covered at home and away from home, providing cover for theft and accidental loss and damage.
Cover for possessions in storage
If you need to put some or all of your contents into a storage facility for a few months or longer, the good news is that many contents insurance policies will provide cover for your possessions while in storage. This means you’ll be protected if your belongings suffer loss or damage due to any insured event, for example fire, storm, theft and flood.
However, terms and conditions apply. For example, your stuff may need to be stowed in a lockable and fully enclosed storage unit that is located in a commercial storage facility and accessible only by you.
If you need to put stuff into storage so you can renovate, downsize or just find some extra space at home, contact your insurer to find out whether they’ll cover you.
What should I look for in a policy?
When comparing policies, keep an eye out for the following features:
Cover that’s right for you. Does the policy provide protection against all the risks that may cause damage to your contents? For example, if you live in a flood-prone area, is flood cover included? If you own a number of expensive jewellery pieces, are they covered by the policy?
Flexibility. Can you tailor cover to suit your unique needs? For example, can you exclude any extra-cost covers you don’t need, or increase your excess in return for a lower premium?
New-for-old cover. Policies that provide new-for-old cover are more expensive than policies that cover the current value of your items, but this is because they offer a higher level of cover.
Accidental damage cover. Check whether the policy covers you for accidental damage to your contents, for example if you accidentally break your TV. Having this benefit included in your policy can provide greater peace of mind.
Personal valuables cover. Some insurers will also offer the option of protecting personal valuables when they’re away from home. This includes items like cameras, smartphones and jewellery, so it’s worth checking if this optional extra is available should you need it.
Efficient claims service. Check to see how quick and easy it is to make a claim with the insurer? Does the provider have a good reputation for paying out successful claims promptly and without any hassle?
How much contents insurance do I need?
The right level of cover depends on a few important factors:
Your possessions. What contents to you want to insure? How much are they worth?
Your budget. How much can you afford to pay for cover?
Your risk tolerance. Do you want comprehensive cover against a broad range of risks, or would you prefer a cheaper policy that only offers essential protection?
To help work out exactly how much cover you need, it’s often helpful to create a checklist of all the items you want to protect. Go through your house one room at a time and make a list of all the important belongings you need to insure. For example, in a living room this list might include:
By listing all the items you want to cover and tallying up their combined value, you’ll gain a much clearer idea of how much your contents are worth. Then you can think about how you would afford to replace them if disaster struck, for example if you lost everything in a fire. Planning for this sort of worst-case scenario will help you work out exactly how much contents insurance is enough.
Calculating contents insurance: Think replacement value, not worth
It can be easy to end up with contents insurance without really thinking about the amount of money you would need to replace everything you own.
Keep track of your belongings. It can be hard to keep track of all your belongings and remember their value, especially if you haven’t written them all down. Over the years you may have bought new valuables or received expensive gifts. If you haven’t reviewed your home’s contents since you first took out insurance many years ago, it might be time to take another look.
Costs add up. Some of your old pieces of furniture might not seem that valuable any more, but if you lost them in a fire, the cost of replacing them would be huge. That old couch you probably couldn’t sell for $50 could cost more than $1000 to replace.
Cover for all scenarios. Those small, valuable items like laptops, cameras and jewellery are at risk of theft. Thieves are not likely to steal larger items, such as fridges, curtains, washing machines and beds, but they can still be destroyed by fire or flood.
Get an accurate estimation. You might try to estimate the total value of your possessions by doing a quick mental calculation and using that figure as your insured amount. But you’ll get a far more accurate figure if you walk through each room of your house and write a list of every valuable item you own and its value. You’ll be surprised at how much it would cost to replace everything in the event of a fire.
Keep an inventory. An inventory could be as simple as listing all your possessions and their value. Alternatively, there are a range of inventory templates available online that you can get through insurance companies.
Remember, it’s not just the big items you need to include, such as furniture, white goods, TVs and computers. Other things, like small appliances, clothing, jewellery, curtains, rugs, books, toys, kitchen items, linen, musical instruments and sports equipment, will all be expensive to replace and should be included in your estimate. And don’t forget items outside the house, such as tools, barbecues, lawnmowers and furniture.
What’s not covered?
When comparing contents insurance, it’s also important to be aware of what a policy doesn’t cover. These are the general exclusions, and the product disclosure statement (PDS) will contain a list of situations, circumstances and events where no cover will be available, such as:
Loss or damage occurs because building work or renovations are being carried out at your home
The loss or damage is caused by actions or movements of the sea
Your claim arises from breaking the law
Loss or damage is caused by a computer virus or hacking
Your claim arises due to a deliberate action by you
You fail to take reasonable care of your contents
You fail to properly secure your home
The loss or damage is caused by a mechanical or electrical breakdown
The loss or damage is caused by wear and tear or gradual deterioration
The loss or damage is caused by rust, rot, mould, mildew or corrosion
You leave your home unoccupied for an extended period of time, for example 60 consecutive days or more
It’s for consequential loss of any kind
Check the PDS for a full list of the exclusions that apply to your policy.
How much does contents insurance cost?
How much will contents insurance cost for you? The answer depends on a number of factors, including:
Your level of cover. The more expensive the items you want to protect, and the higher the level of cover you select, the higher your premiums will be. Adding optional covers to your policy will also drive premiums up.
Where you live. Insurers will consider the location of your home when calculating your premiums. For example, if you live in a flood-prone area or in a suburb with higher than normal burglary rates, expect your premiums to be higher.
How secure your home is. If you have measures in place to deter thieves and burglars, for example, deadbolts and a state-of-the-art alarm system, you could enjoy cheaper contents insurance.
Your claims history. How often have you made claims on your house and contents insurance policy in the past? If you’ve submitted claims frequently over the years, you can expect higher premiums.
The excess you choose. You will typically be able to adjust your excess amount and vary your premium as a result. A higher excess will result in lower premiums, and vice versa.
To get a better idea of how much you can expect to pay for cover, obtain quotes from multiple insurers. You can then compare policies to sort out which one provides the best value for money.
Is contents insurance worth it?
That’s the million-dollar question, and one most homeowners have asked themselves at one point or another. To find the answer, take a moment to think about what would happen in a worst-case scenario, such as if your house burned down and you lost everything. The emotional impact would undoubtedly be huge, but what about the financial impact?
Would you be able to afford to replace all your worldly possessions – furniture, clothing, white goods, TV and all those other essential items that make your house a home?
For most people the answer is a big fat no, which is why contents insurance is a worthwhile investment. Like any other type of insurance, it’s something you hope you will never actually have to use, but paying for cover is just one of life’s necessary expenses. So if the unthinkable does happen and something goes wrong, you can enjoy the peace of mind that comes with knowing you will be financially protected.
How to save on contents insurance
Want to reduce your contents insurance premiums? There are several simple ways you can cut down on the cost of cover, such as:
Shop around. The simplest way to find affordable cover is to compare a range of policies and quotes. Of course, remember that just because a policy offers the cheapest policy doesn’t mean it’s right for you, so check out the full cover features before choosing an insurer.
Choose a higher excess. If your insurer offers a flexible excess, you may want to consider raising this excess in order to lower your premiums.
Look out for discounts. Many insurers offer discounts that can help you enjoy significant savings on the cost of cover. These include bundling discounts house and contents insurance together into one comprehensive package, online discounts , multi-policy discounts , loyalty discounts , and seniors discounts .
Minimise claims. Making numerous claims on your policy can increase the cost of cover, so consider whether it’s really worth making a claim before notifying your insurer.
Don’t buy cover you don’t need. Before you start shopping for a policy, take some time to think about how much cover you need and what risks you need to be protected against. You will then be able to choose a level of cover that’s adequate for your requirements, and can avoid adding unnecessary extra-cost options to your policy.
Review your policy regularly. The contents of your home are always being changed, updated and upgraded, and so too are the policy options offered by New Zealand insurers. With this in mind, it’s a good idea to regularly review your policy and work out whether you may be able to get a better deal somewhere else.
Contents insurance for renters
If you’re renting a home, you don’t need to worry about insurance cover for the actual building you live in – that’s the landlord’s responsibility. However, you do need to worry about insurance cover for all your stuff inside the house, like your furniture, white goods, electrical appliances, clothing and more.
The good news is that some New Zealand insurers offer specific contents-only insurance policies designed to suit the cover needs of renters. These policies can protect your belongings against loss or damage caused by a wide range of risks, including fire, theft, storm, vandalism, accidental damage and even flood. There’s also cover for your legal liability if someone suffers an injury at your home.
Check out our guide to renter’s insurance for more information on how to compare and choose a policy as a tenant.
Contents insurance for landlords
As a landlord, you might be wondering whether you need any cover for your investment property. Sure, home insurance is essential to cover the building itself and any permanent fixtures, but what benefits does contents insurance offer for a landlord?
Well, it can cover all the items you own at the property, including:
Carpets and rugs
Portable household items
Curtains and blinds
It provides protection against loss or damage due to fire, storm, theft, vandalism, flood and a wide range of other insured events, while also covering theft or malicious damage caused by tenants. Combined with all the usual benefits that home insurance has to offer, not to mention protection against loss of rental income caused by a range of events, the purpose of comprehensive landlord insurance becomes clearer. For more details on choosing a policy, check out our comprehensive guide to landlord insurance.
How do I make a claim?
If you need to make a claim on your contents insurance, your insurer will be able to provide details on how to lodge your claim. You will generally need to:
Contact your insurer. Contact your insurer as soon as possible after an insurable event occurs. This can be done either online or over the phone.
Fill out a claim form. You’ll need to provide full details of the event that has occurred and the loss or damage to your contents as a result. This is usually done by completing a claim form, which is often available online but can also be posted to you by the insurer.
Provide supporting evidence. Your insurer may request evidence to support your claim, such as photographs of the damage and receipts, valuations and proof of ownership of the lost or damaged contents.
Co-operate. The last thing you need to do is co-operate with the insurer throughout the claim. Be upfront and honest at all times and your claim will be processed as quickly as possible.
There are also a few different ways in which an insurer may settle your claim. They may:
Repair or replace the stolen or damaged items
Pay you the cost of repairing or replacing the items
Pay you a cash settlement
Give you a gift card
Other questions you may have about contents insurance
A. That depends on who owns the contents. If you’re a tenant and you want to insure your important possessions, you’ll need to consider renter’s insurance. However, landlords who lease out fully-furnished properties can also benefit from contents insurance. In addition, landlord contents insurance can also provide cover for other contents that are the landlord’s responsibility, including carpets, curtains and some electrical appliances.
A. Yes, renter’s contents-only insurance policies can provide legal liability cover if you are legally liable when someone else suffers an injury, or damage to their property.
A. Most policies require you to pay an excess when you make a claim. However, many insurers allow you to adjust your excess to vary your premium amount, so contact your insurer to find out the minimum excess available.
A. Yes, it’s still possible to have your claim paid even if you haven’t kept receipts. The insurer will ask you to show proof of ownership, which you may be able to do by providing photographs of the items in your house, warranty cards, instruction manuals, valuation certificates, original packaging, credit card statements and in some cases serial numbers. Contact your insurer for details of what they will accept as proof of ownership if you are unable to provide receipts.
A. You can buy contents insurance online or by contacting an insurer over the phone.
A. Contents insurance cover for pets varies widely between insurers. Generally speaking, pets aren’t covered as standard. Also, keep in mind that most insurers will not provide any cover for damage to your contents caused by a domestic pet.
Richard Laycock is Finder’s insights editor after spending the last five years writing and editing articles about insurance. His musings can be found across the web including on MoneyMag, Yahoo Finance and Travel Weekly. When he’s not doing deep dives on data, he is testing the quality of cocktails in his newfound home of New York. Richard studied Media at Macquarie University and The Missouri School of Journalism and has a Tier 1 Certification in General Advice for Life Insurance.
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