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Contents insurance pays to repair or replace your belongings, such as furniture, clothes, appliances, electronics and jewellery, when they are damaged, destroyed or stolen by an event the policy lists. Most policies also include legal liability cover, which protects you if you are found responsible for injuring someone or damaging their property.
You can buy it on its own if you rent or own a strata unit, or bundle it with building cover if you own a house. The price gap between two policies is usually explained by four things: the sum insured, the events covered, the item limits and the excess. This page walks through each so you can compare like with like.
By Better Rate Mate Editorial Team ยท Last reviewed
The working test is whether an item is permanently attached to the home. Moneysmart gives the examples that trip people up: a floor rug is contents but the floorboards are not; pot plants can be contents while garden plants are not; an above-ground pool that can be moved may be contents while an inground pool is part of the building.
The line moves between insurers and between types of policy. Carpets, fitted blinds and built-in appliances are commonly treated as part of the building for a house owner, but a renter or strata unit owner can often insure them as contents because they own them and the building policy does not. Read the definitions section of the Product Disclosure Statement (PDS) before you set your sum insured, because anything you value that falls on neither side of the line is uninsured.
| Item | House owner | Renter or strata unit owner | Why it matters |
|---|---|---|---|
| Freestanding fridge, washing machine, TV | Contents | Contents | Often subject to an electrical or appliance limit |
| Built-in dishwasher, oven, cooktop | Usually building | Often contents if you own them | Easy to leave out of both policies |
| Carpets, fitted blinds, curtains | Usually building | Often contents | Unit owners should check the strata policy first |
| Floor rugs, pot plants, outdoor furniture | Contents | Contents | Items kept outside may have lower limits |
| Jewellery, watches, art, collections | Contents, with limits | Contents, with limits | Low default caps unless you list the item |
| Cars, motorbikes, boats | Excluded | Excluded | Need their own policy |
A standard contents policy is a listed-events policy: it pays for loss caused by the events it names, typically fire, storm, lightning, earthquake, theft or burglary, malicious damage, impact, escape of liquid and (in most policies, not all) flood. If the cause is not on the list, there is no claim.
Moneysmart notes that most contents insurance does not include accidental damage. Adding it covers mishaps that are not a listed event, such as a stained couch or a dropped television. It costs more, and it still carries exclusions such as wear and tear, gradual damage and damage caused by pets, so read that section of the PDS as closely as the list of events.
Most contents policies pay replacement value, often called new for old: the cost of buying the item new today rather than what your used one was worth. Some cheaper policies pay indemnity value instead, which allows for depreciation. Moneysmart's example is a fridge worth $500 in its current condition; indemnity cover pays about $500 even if a comparable new fridge costs much more.
Replacement value is then capped by item limits. Policies commonly set a maximum for categories such as jewellery and watches, art, collections, cash, and sometimes electrical appliances. Moneysmart's illustration is a $1,000 appliance limit applied to a $2,000 television: you would pay the other $1,000 yourself. If you own anything worth more than the category cap, list it as a specified item, which usually costs extra but lifts the limit to the value you nominate.
Standard contents cover applies at the insured address. Portable contents cover, usually an optional extra, protects belongings such as phones, laptops, glasses, handbags, cameras and bicycles when you take them out. Unspecified portable cover gives a small per-item cap; specified portable cover insures named items for their listed value. Check where it applies (some policies are Australia-only, some worldwide for a limited period) and whether it covers accidental loss or only theft and damage.
The quickest reliable method is room by room: list what is in each room and price it new, at today's prices. Include the things people forget, such as linen, kitchenware, tools in the garage, clothing and shoes. Moneysmart suggests filming each room on your phone as a record, which also helps prove ownership if you ever claim without receipts.
The Insurance Council of Australia publishes a free contents calculator that works through the same process. Whatever figure you arrive at, review it at each renewal and after any large purchase. Underinsurance is not only a building problem: if your contents sum insured is too low, the most the insurer pays is the sum insured, and some policies apply further reductions.
Beyond the listed events, contents policies commonly include legal liability cover ($20 million in both the NRMA and Suncorp home PDSs), temporary accommodation if you cannot live at home after an insured event, replacement of spoiled food after a power outage or fridge motor failure (sometimes an option), cover for contents in transit when you move, and new-for-old replacement of locks after keys are stolen. The amounts and time limits differ between policies, and these are the benefits a cheaper policy most often trims.
It is worth pricing up what it would cost to replace everything you own at today's prices before deciding. Most people are surprised by the total. Contents insurance also usually includes legal liability cover, which protects you if you are found responsible for injuring someone or damaging their property, and that can be worth more than the contents cover itself.
It covers loss of or damage to your belongings caused by the events listed in the policy, typically fire, storm, theft, malicious damage, escape of liquid and, in most policies, flood. It usually includes legal liability, and it can be extended with accidental damage and portable contents cover. Wear and tear, gradual damage and items above category limits are the common gaps.
Only if you add portable contents cover, or if the policy includes a small built-in allowance. Portable cover usually has a low per-item limit unless you list specific items such as a laptop, bike or engagement ring with their values.
There is no reliable average, because the premium depends on your sum insured, postcode, security, claims history and the excess you choose. The way to compare is to get quotes on the same sum insured, the same excess and the same options, then compare what each policy covers.
The product is largely the same, but a renter only needs contents and liability cover because the landlord insures the building. Renters can often insure items such as carpets or blinds they own as contents, where an owner would insure them under the building policy.
