Cairns Mortgage Broker – Preston Finance – Home Loans Cairns

Contents Insurance When Renting?

cairns mortgage brokers | Lauren Eakins

You have just signed a lease, and you are getting ready to move into your new place. As far as being a tenant, you don't have to worry about covering costs for insuring the building or land as that onus is on your landlord. But what about your contents such as your SMART TV or Friheten Ikea couch? Who would be responsible if there was a fire or natural disaster and the house along with your possessions were damaged? 

The building would be covered by the landlord’s insurance, so you won't have to foot the bill for that. However, all of your possessions, some of which you hold near and dear, would not fall under the landlord's insurance which is why you may need to consider contents insurance. While your lease term may only be short term, there is no reason why you should not have peace of mind about your belongings, which is where contents insurance comes to play. 

Let's take a closer look

Every year, thousands of homes around Australia are affected by bush fires, floods and cyclones. North Queensland has notoriously unpredictable cyclone patterns and is considered a high-risk natural disaster region. We can all hope that nothing will ever happen to our property but based on the statistics, it is highly probable you could be severely affected by these weather conditions and potentially be left footing the bill to replace everything you have worked hard to earn. 

Although tenants may feel that their belongings are not worth paying the premium on contents insurance, more often than not there are some high-value items that are often forgotten about, such as laptops, phones, tablets, jewellery, couches etc. The other important thing to consider is the public liability insurance that will generally be included in your contents insurance policy. This is important because if you accidentally cause damage to the property, you could be out of pocket thousands of dollars to repair. For example: 

You put a load of washing on before you leave for work. When you come home, the water has overflowed from the washing machine due to a blockage in the pipes and there is significant damage to the floors in your apartment, and in the adjoining neighbour’s apartment. Because you own the washing machine, and the damage was caused by it overflowing, the cost to fix the damaged floors in both the apartment you are renting and the neighbours, is your responsibility. Depending on the kind of floors, this could be quite a costly expense.

Other Things to Consider

An excellent way to decide if contents insurance is right for you is to create an inventory spreadsheet of all your belongings and calculate their value. Then ask the question - Would I be able to afford to replace everything if a catastrophe occurred? If the answer is no, then contents insurance may be a viable option to consider. Accidents can happen and are often not planned for, so it is important that this is also taken into consideration when deciding if you need contents insurance. 

Another option you may consider, especially if you have pets or young children, is accidental damage insurance cover. You may breathe a sigh of relief knowing that you are covered in case the dog knocks over the flat screen on the way to barking at the mailman. 

If you are having trouble deciding, or if you are wondering what exactly is covered by contents insurance, speak to the team at Preston Finance & Insurance. 

General Advice Warning

This advice does not take into account any of your particular objectives, financial situation or needs. For this reason, before you act on this advice, you should consider the appropriateness of the advice taking into account your own objectives, financial situation and needs. 

Before you make any decision about whether to acquire the policy, you should obtain and read the product disclosure statement for the policy.

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