Contents insurance policies are a great option for renters who want to protect their possessions and have peace of mind. Read our comprehensive guide to find out what you should look for in a policy and what you’re covered for.
Your landlord will have insurance for the building only – meaning you’ll need renters insurance to protect your electronics, sporting gear, jewellery and basically anything else that’s not nailed down.
Why do I need renters insurance?
Whilst you may not own your home, your possessions still hold value and it’s important to protect them.
Keep in mind the following:
You are not covered by your landlord’s insurance. Many renters assume that a landlord’s insurance will cover the renter’s contents as well, which unfortunately is not the case.
Your assets add up to more than you might think. If your home is gutted by fire and you have to replace everything you own, you might have to fork out tens of thousands of dollars to replace your possessions.
You can still obtain insurance if you live in a share house. The process of purchasing a policy for the contents of shared accommodation does take a little extra effort, but it might prove incredibly valuable if, for instance, you’re a student who depends on an expensive computer and specialised equipment.
You might benefit from liability cover. If someone injures themselves in your home you could be liable for hefty medical and legal fees. Liability cover might help you cover the costs.
How much does contents insurance cost?
The cost of contents insurance is highly dependent on your own circumstances. That’s why it’s so important to compare – cover can differ by hundreds of dollars between policies.
The cost of your insurance premium will be calculated on the basis of several factors:
The location of your home. Premiums are normally higher if you live in an earthquake or flood-prone area, or in a neighbourhood with a high crime rate.
Your home security. Deadbolts, window locks, cameras, and alarms all help to make your insurance cheaper, as do deterrents such as CCTV cameras or an alarm system.
Your level of cover. Naturally, the more optional extras you select, the more your premiums will increase.
What types of items can you protect with renters insurance?
You can insure almost anything that’s not nailed down including:
Furniture, rugs, blinds and other furnishings
Portable swimming pools
Sporting and fitness equipment
Computers, TVs and other electronics
What other benefits does renters insurance offer?
Here are some of the additional benefits most home renters insurance policies offer:
Legal liability protection. This protects you if a guest injures themselves or damages something while they’re in your home. Also covers you for a wide range of damage you cause to others or their property while you’re anywhere in New Zealand.
Refrigerated food and medicine spoilage. Pays to replace your refrigerated food and medicine if an insured event knocks out your refrigerator.
Contents that you temporarily remove. This protects your items if you move them to a new home or to a bank deposit box. It will protect them for a set period of time (usually around 90 days) at the new location, but not during the transportation or while they are in your car.
Temporary accommodation. Pays to put you up in temporary accommodation if your home is unliveable after a covered event.
Lock replacement. Pays to replace your keys and/or locks if they’re lost, stolen or damaged.
Outdoor items. Covers garden furniture and other belongings you keep outside like lawnmowers and spa pools.
What should I look for in a policy?
You should consider three main things when deciding what cover you need:
A policy that covers your risks. Choose a renters insurance policy that gives you protection for your belongings. You don’t need cover for the house or apartment itself, that’s the responsibility of your landlord.
Good value. Look for a balance between reasonable premiums and adequate cover. Make a list of the things you’re most worried about replacing, such as expensive jewellery or a laptop you constantly use. Then find a policy that provides a generous limit for those items, but that also offers benefits such as discounted premiums based on your home’s security features.
Does contents insurance for renters cover valuable items?
Renters insurance will cover extremely valuable items like jewellery, artwork and collectibles but they’re treated a little differently than all your other stuff.
For most items you insure, you’ll just add up the value of everything and submit one total value to the insurer. No need to tell them specifically that you’ll be insuring two TVs, an Xbox, three phones and a load of furniture.
However, you will most likely have to specify extremely valuable items one-by-one on your policy. That’s because most policies have limits on what you can claim for any one category of item, for example $1,000 per item of jewellery.
Sometimes you need more than that and that’s when you need to specify your valuables and the amount you want to insure them for (these are called specified items). Now you can get around that $1,000 jewellery limit and insure that $15,000 Rolex.
What about items I take with me outside the home?
Your renters insurance should automatically cover your items when they’re outside the home up to a certain monetary limit, for example $5,000. This will cover items like your jewellery, laptop, phone, camera and other valuable items anywhere in New Zealand. It will protect you against damage, accidental loss and theft.
Is renters insurance worth it?
It’s easy to overlook how much valuable stuff you own. Stop to consider all the electronics, furniture, jewellery, clothing and sporting equipment you have and what you would do if a fire came through and wiped it all out.
It’s a scary thought, and that’s why renters insurance is a worthwhile investment. A basic policy can cover up to $50,000 worth of belongings for less than $10 a week.
It’s bad enough to experience a devastating loss and all the stress that goes along with it. Knowing that you won’t also have to spend tens of thousands of dollars replacing everything will go a long way toward easing the burden.
What is the best renters insurance in New Zealand?
The best renters insurance is the one that meets your needs and offers you the most value. That means the policy that’s best for one person will be different than the one that’s best for someone else.
Here are a few questions you can ask yourself when deciding which one is best for you:
Do you have any special risks? You’ll want a policy that covers you for the risks you actually face. If you live in a flood zone, the best policy for you will have flood cover. If you have rambunctious kids, the best policy will probably have accident protection.
Do you have any extremely valuable items? If so, the best policy will be one that either offers a high enough sub-limit or allows you to insure it separately as a specified item.
Do you carry expensive items with you when you’re out? If you want additional protection for certain items you take outside, you’ll need to list them separately on your policy.
How to make the most out of your renters insurance comparison
When comparing insurance policies, you’ll want to compare on more than just price. Sometimes it comes down to features and event the fine print. Here are some tips to help you make the most out of your comparison:
Look at the sublimits. You might have $30,000 worth of contents cover, but did you know that might not be enough to cover a $2,500 watch? Most insurers have sublimits for certain types of items and these limits can vary from insurer to insurer. So when comparing policies, you’ll want to make sure the sublimits line up.
Look for discounts. Some insurers offer discounts including discounts for applying online or for taking out more than one type of insurance with them. When comparing policies, see if there are any discounts that would tip the scales in favour of one policy over the other.
Look at the exclusions. Some policies will exclude certain items that other policies will insure just fine. For example, some policies will pay to replace photographs but others won’t.
Look at the features. There are some features that insurers include automatically which others make you pay extra for. For example, some policies will automatically cover your appliances if the motor burns out, but other policies will charge you extra.
How to calculate the amount of renters insurance you need
When determining how much cover you need, it’s important to calculate how much it would cost to replace all of your items and to work out what risks you face. Many insurers offer online calculators that can help you come up with your final figure but here are the steps you can follow if you’re doing it yourself:
Take an inventory of all your stuff. Go through your place and list out everything you own onto a sheet of paper and group them into categories: electronics, clothes, furniture, fitness equipment, jewellery, etc. For collections like clothes, DVDs and similar, you don’t have to list them out one-by-one. You can just write out “100 DVDs”.
Determine the value of each item or collection of items. Work out how much it would cost to replace each item or collection of items, not how much they’re currently worth. There’s a big difference. If someone steals your 5-year old TV, it will cost you much more to replace it with a brand new one than what the current one is worth now.
Find out what your policy’s sub-limits are. Your policy will have sub-limits like $1,500 per computer or $2,500 total for all artwork. If any of your items or collections are worth more than this, put a star next to them on your list. These are your specified items that you’ll have to list separately on your policy.
Calculate the totals. Calculate the total value of everything on your list. This is the figure you’ll give your insurer. You’ll also have to provide them with a list of all your specified items along with their individual values.
Update your figures from time to time. It’s easy to accumulate more and more stuff over time, so don’t forget to recalculate how much it’s all worth every so often. If Santa brings you a bunch of new camping gear and you’ve also recently replaced your whole bedroom suite, you’ll want to make sure it’s all accounted for in your cover. Otherwise you could end up underinsured.
If you haven’t already started, keep your receipts, warranty cards, valuation certificates and any other documentation that can prove ownership of your items. These will help out tremendously if you ever need to make a claim.
What happens if you need to claim?
Your insurer will offer instructions on how to claim but generally the process goes like this:
Contact your insurer. If your stuff is damaged, destroyed or stolen and you think you’re covered, email or phone the insurer as soon as possible.
Fill out your claim form. You can usually find your insurer’s claim form online or ask them to send you one. Fill this out along with details about what happened and exactly what items were damaged.
Provide evidence where possible. Your insurer may want to see proof that you actually owned the items you are claiming for. Receipts, warranty cards and valuation certificates work well but you can even use photos of the damaged items or photos of you with the items prior to the event.
Cooperate with the insurer. Being honest with the insurer and giving them all the information they need will go a long way in speeding up your claim.
Get reimbursed. If your claim is approved, your insurer will organise repairs, pay you the value of the items lost, send you replacement items/gift cards for those items or some combination of these depending on the type of damage that occurred.
Some other questions you may have about insurance for renters
No. Most renters insurance policies only cover the possessions of the policy holder. Your flatmates will need to take out their own renters insurance to ensure their belongings are covered.
No. You are not usually covered for theft, vandalism or other events that are caused by someone who lives in the home or is invited in as their guest.
Yes. Universities usually don’t take any responsibility for belongings kept in student accommodation. It’s better to be safe than sorry, so you should consider renters insurance especially if you’re dependent on things you can’t afford to replace like a laptop.
Most contents insurance policies automatically include liability cover so there’s no need to take out a special policy covering your personal liability. However, this doesn’t cover professional liability relating to any business you operate. If you run your own business, you should consider professional indemnity insurance, product liability insurance depending on the nature of your work.
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