Compare contents insurance

What is contents insurance?

Contents insurance is a type of home insurance that covers your personal belongings if they’re damaged, destroyed or stolen. Think clothes, electronics, appliances, jewellery, furniture and other furnishings like rugs, curtains and lamps.

It’s often bundled with building insurance in a combined policy called home and contents insurance, but you can also take out contents-only cover if needed. Just keep in mind contents-only insurance won’t cover the structure of your home itself.

Most contents insurance policies will repair, replace or pay you for damaged or stolen items, depending on the type of item, repair costs and whether a suitable replacement is available.

A standard policy usually only covers items inside your home, unless you add portable contents cover for protection outside your home.

When am I covered by contents insurance?

A standard contents insurance policy covers damage or loss from the events listed below. The ‘Contents’ column, highlighted with an orange border, shows what applies specifically to contents insurance, separate from building insurance:

Keep in mind that this table is just a general guideline, and cover can vary from policy to policy. For example, not all policies define floods, rainwater runoff and storm surges the same way. 

That’s why it’s important to brush up on the definitions in your policy’s product disclosure statement (PDS).

What does contents insurance cover?

Now that we’ve covered the events that can lead to a claim, let’s take a look at what’s actually covered, along with some key details for each category.

Coverage varies by policy, but most include the following:

What optional extras are available with contents insurance?

Most policies will give you the option to upgrade your cover with optional extras. These include:

• Portable contents cover. Essentially, cover for portable items if you take them away from your home. Some policies split this into ‘listed’ and ‘unlisted’ portable items. Listed contents are covered individually and for their full value, whereas unlisted contents fall under an overall ‘per claim limit’.
• High-value contents cover. If you own items that are worth more, such as luxury watches or artwork, this extra cover ensures those items have the protection required.
• Accidental damage cover. Covers you for those moments when life happens in a way you weren’t expecting it to. Examples of accidental damage cover may include wine spills on the carpet or dropping your laptop.
• Underinsurance protection. This can be handy in case you undervalue your contents. If a policy offers 30% underinsurance protection and you find that you’ve undervalued your possessions, your insurance provider may pay you up to 30% more than the sum stated in your policy.
• Emergency accommodation. This generally covers some, or all, temporary accommodation costs, should your home become uninhabitable as the result of an insured event. This benefit is time restricted, such as 12 months.
• Electrical motor burnout. This covers motor burnout for items, such as whitegoods, after power surges. Keep in mind, there may be an age limit for the appliance to be eligible.
• Flood cover. Many insurance providers won’t automatically include this in a policy; you’ll need to get it added for a fee.

The policy add-ons available will vary from policy to policy. Whichever extras you add on, they’ll increase the cost of your premium.

How to calculate your insurance needs

Here are a few steps you can take when comparing contents insurance:

• Make a list. Look around at your valued possessions and take stock of what you have. When writing up your list, include everything from furniture to your laptop.
• Come up with a price. Try to put a value on your belongings. You’ll probably wind up with a rough estimate for items like clothing and an exact value for something like a laptop.
• Prepare for the worst. Think about which events you are most likely to need insurance for, based on where you live. This could be insurance against flooding, bushfires or theft.

Once you’ve completed these steps, you should have a rough idea of what you want to insure, and for how much.

How can I save money on my contents cover?

The goal when searching for content insurance should be for you to find a competitive price while ensuring you have enough coverage for your needs.

Here are some ways that you can reduce your home contents insurance costs:

• Shop around. Avoid the trap of auto renewing your policy. Insurance providers have regular deals for new customers to maximise by switching.
• Secure your property. The more secure your property, the lower your premium might be. Measures can include installing locks on doors and windows, and setting up a security alarm or camera.
• Multiple-policy discount. If you have more than one product with a provider, you could be eligible for a multi-policy discount. Even if you don't currently qualify for this discount, speak with your provider about what deals they can offer to tempt you to switch to them.
• Flexible excess. You can reduce your insurance premium by opting for a higher excess. This means that, in the event of a claim, you’ll need to pay a higher upfront payment. But in return, your monthly insurance premiums may be cheaper.
• Pay yearly. You usually have the option to pay monthly or yearly. Paying yearly can often land you a discount. 

How to compare contents insurance

Most contents insurance policies are very similar at a high level, but there are key differences that separate them. 

Here’s what to focus on when comparing your options:

• Item limits and sub-limits. Every policy has limits on individual items and categories (e.g., jewellery, electronics, bikes), but the thresholds vary. Some policies offer higher automatic limits than others before requiring you to specify (and pay more to insure) high-value items.
• Excess options. Some insurers have a wider range of excess choices than others, and this gives you more control over your premiums. A wider range means you can fine-tune the balance between what you pay upfront and what you’d owe in a claim.
• Claims and customer service. Take a quick look at online reviews. Do customers say the insurer is easy to deal with, or is it a nightmare to get a claim paid? 
• Premium and discounts. The insurance space has no shortage of discounts, including discounts for bundling policies (like building plus contents), installing security systems and purchasing your policy online.

Once these bases are covered, if you find more than one policy that fits the bill, then you can choose the one with the best price.

What isn’t covered by contents insurance?

Not everything is covered by contents insurance. Exclusions exist, and they generally fall into two categories: specific exclusions, which apply in certain situations or events, and general exclusions, which apply to things insurers won’t cover at all.

Here are a few examples of each. For the full list, check your PDS.

Specific exclusions

• Waiting periods for disasters. Most won’t cover damage from predictable events like bushfires, floods and cyclones if they happen within the first 48 to 72 of taking out the policy.
• Theft without forced entry. If there are no signs of forced entry, for example a thief got in through an unlocked door or an open window, some insurers won’t cover your stolen items.
• Undocumented lightning damage. To claim for lightning damage, you often need to have evidence of lightning strikes in your area and/or written confirmation from a qualified repairer that the damage was caused by lightning. 

General exclusions

• General wear and tear. Insurance covers sudden damage, not gradual wear and tear. 
• Lack of maintenance. Most insurers will deny your claim if it’s due to lack of maintenance. For example, you neglect a leaky pipe that eventually bursts and fries your computer.
• Vermin and pests. Related to the above, termites, rats and other pest infestations are usually due to lack of maintenance rather than sudden damage.
• Actions of the sea. While tsunamis and storm surges are often covered, more naturally occurring actions of the sea like coastal erosion, tides and king tides are usually not covered. 
• Illegal acts. You usually wont be covered if the damage is due to illegal activity undertaken by you or someone you’ve allowed into your home.
• Structural defects. If your contents are damaged as a result of a structural defect in your home (like a sinking foundation), you most likely won’t be covered.
• Unoccupied homes. Many insurers won’t cover your home if it’s left empty for too long (usually 60 days or more), unless you notify them first.

Some exclusions are obvious, others not so much. If you’re unsure about something, your PDS will have the details.