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By Rachael Stevenson
“Prepare and prevent, don’t repair and repent.”
Owners and tenants both have contents in a property so it’s important that both parties are adequately insured to make sure that valuable possessions are protected. Contents insurance covers the financial cost of repairing or replacing possessions if they are damaged or lost and can include items such as furniture, blinds, clothes, fridges, televisions, computers, tools and jewellery. Below is a brief guide on where to start if you’re looking for contents insurance, whether you’re a tenant or property owner.
Who insures what?
As an owner, you are responsible for any contents in the property, even if the property is not provided furnished. Items like floating floors, carpets, dishwashers and blinds fall under contents, so it’s very important to have these items covered in your building and/or landlord policy. Contents insurance is not just for people who own their own home, it is also important for people renting a home; as a tenant, you are responsible for the contents and belongings that you bring to the property. If the worst should happen, the landlord’s building insurance will only cover the property the landlord owns – a tenant’s belongings are not included.
Who is responsible for the contents?
As a tenant, if you accidentally or intentionally damage the building or contents of the property you are renting, you must notify the agent or owner as soon as possible to ensure correct repairs and insurance procedures can be put in place. You will be expected to pay for repairs or replacement.
If the damage is caused by a third party or the event was outside the control of the tenant or owner, for example, a break-in or storm, then each party will be responsible to replace or repair any contents that they own.
If the tenant’s belongings are damaged by a building fault such as a ceiling collapsing or roof leak, then a third party will need to determine if the damage was caused by negligence. If the damage was not caused by the owner’s negligence, then the tenant will be responsible to repair or replace their own contents.
Types of contents insurance
The type of insurance you choose will affect the premium you pay (the premium is the price charged by the insurance company for providing the insurance cover). Some policies cover you for defined events (e.g. burglary or fire) while others may cover you for any accidental event. Some policies may even give you limited cover if you take an item (e.g. laptop or mobile phone) outside of your home.
The two main types of contents insurance:
Policies that cover the value of your belongings
Policies that replace your belongings with new items (e.g. ‘new for old’)
Valuable items may need to be insured for a higher specific value or listed separately under the policy otherwise they might not be covered for their full value or may even be excluded from the claim.
How to save on your insurance?
‘New for old’ policies are usually more expensive, so you will need to work out what level of cover you want and weigh up the costs. You may be able to save money on the type of insurance by choosing a higher excess (the excess is the amount of an insurance claim that consumers have to pay). For example, you may choose to pay the first $1000 of any loss, therefore reducing the insurance premium. Bundling is also a great way to save on insurance. Tenants can combine motor vehicle, health and contents policies. For owners, a contents policy is usually covered in a Landlord Protection Policy or you can add it to a building policy.
If you require more information, it’s best to speak directly to an insurance company or talk to a few to see who can offer the best deal. You may also like to consider using the services of an insurance broker who will be able to give you information on multiple insurance policies from multiple companies.
About the author
Rachael Stevenson is a Property Manager in Perth at Empire Estate Agents. Rachael has property flowing through her blood, having been brought up in a real estate household, she also and has the wonderful ability to handle all situations with a client and customer service focus, matched with the ability to multitask with ease, makes her an ideal part of the Property Management team at Empire in East Victoria Park.
Need more information or help with any other of your property management questions? Feel free to call and speak to us at Empire Estate Agents on (08) 9262 0400 or email reception@empireestateagents.com.