Do renters really need contents insurance?
There's a certain level of responsibility (or lack thereof) that comes with being a renter.
If you're living in an apartment, your strata fees are usually covered by your landlord, the water bills are often paid for you, and it's almost always the landlord's responsibility to look after maintenance.
If you're not the owner, you usually don't have to stress about these things - it's quite possibly the best part of being a renter. But tenants often fail to consider their responsibilities to themselves when it comes to contents insurance.
Who's liable for damages in the event of a fire? If, in a worst-case scenario, there is a fire or a flood and you lose all your personal possessions, contents insurance is a must to be able to make a claim. No insurance, no dice.
But according to Understand Insurance, an initiative of the Insurance Council of Australia, 74% of Australian renters don't have contents insurance.
In 2012-13, NSW Fire and Rescue responded to over 6000 structural fires, and in the same year cyclone Oswald left 2000 homes in Queensland uninhabitable. For a country that is disaster-prone, it's disconcerting to think that only a quarter of renters are covered by insurance.
For most insurers, the minimum level of cover for contents is around $20,000. At first you might find that figure too high for the value of your assets - but if you've got a few business suits, an interest in fashion, a collection of DVDs, a television and a computer, that's likely to easily account for the $20,000.
One in five Aussie renters will admit to owning an item in their wardrobe worth $1000 or more. About one in three residents who would value their wardrobe at over $5000 are unsure whether their insurance covers the cost of replacing it.
Considering that the common minimum cover is $20,000, it's clear that while we've definitely got the assets, we don't always have the insurance to protect them.
Sites such as Mozo and ComparetheMeerkat are helpful for comparing insurance plans.
For a minimum cover of $20,000, with an excess fee of $200, Mozo finds Woolworths to have the cheapest deal. For $37.65 a month on the Standard Contents plan, you get the basic coverage, which includes fire and storm damage and theft.
For an extra $7 a month, you can also cover portable items such as your phone or handbag for accidental loss, theft or damage.