Should I get insurance when renting a home?

When you’re renting a house, it can be easy to think of insurance as your landlord’s problem. You’re just the tenant, right? It’s important to remember that while you don’t own the place you call home, it’s filled with all your stuff – and that stuff could cost a lot to replace if the worst happens. That’s where insurance comes in.

Here are four common questions tenants ask about insurance. 

“Aren’t I covered under my landlord’s insurance?”

This is a common misconception. While it’s true that landlords have insurance, this usually doesn’t cover the tenant’s belongings. For example, if there’s a big fire, the landlord’s insurance will cover the structural damage to the home but it won’t cover the loss of your clothes, electronics, furniture or anything else you had inside at the time. For that, you need your own contents or renters insurance. 

“I don’t own much stuff, really. Do I need insurance?”

Some people waive off contents insurance because they don’t think they own very much - but what would your stuff really cost to replace? Many insurance providers offer a contents calculator on their website, where you can have a play around and see how quickly the number adds up. Start by calculating your laptop, smartphone and clothes, plus any big electrical appliances (like a TV or washing machine). Even the cost of replacing your bed, sheets, duvet and pillows might make you wince. If the thought of having to replace all those items with your own savings sounds painful, insurance might be worth it for you, after all. 

“What does contents insurance actually cover me for?”

This will vary from provider to provider, and from policy to policy. You can also choose how much cover you’d like – whether that’s $10,000 or $100,000. It’s important to ask questions and read your policy, so you have a good understanding of what’s included in your particular plan. Generally, most contents policies cover you for items that are stolen or damaged at your rental home or when you’re out and about. It’s also important to know what you’re not covered for. For example, if you take out a contents insurance policy as an individual, that won’t cover your flatmate’s stuff, even though you live together. Your contents insurance also won’t cover items you take with you on a trip outside of New Zealand. 

“I’m careful, so I don’t need insurance, right?”

While your friends go around with cracked iPhone screens, you’re the careful one. Unfortunately, we know bad things happen to good people. With the right contents insurance, if someone smashes your car window and nicks your laptop, sunglasses and sports gear, you’re covered. If your flatmate accidentally damages your stuff, or your home gets broken into, you’re covered. Insurance is for those worst case scenario moments that are out of your control, or an accident.

As a tenant, it’s also important to consider personal liability insurance. When you’re renting, you can be held liable for damage you cause to your landlord’s property, or even damage caused by your friends or other guests. Personal liability insurance is often included in renters or contents insurance, or can be included as an add-on. 

For more information and advice specific to your situation, speak to an insurance provider or broker.