For inexperienced renters it's easy to fall into the trap of assuming landlord insurance will cover tenant's personal belongings in the event of fire, damage or theft. In reality, landlord insurance and tenant contents insurance are two very different services.

Tenant contents insurance must be calculated with care. Under insure your belongings and you run the risk of being caught short in the event your possessions are lost, damaged or stolen. Before taking out content insurance on your home, create a spreadsheet (or write a list) containing all your worldly goods including shoes, jewellery, mobile phones, iPods, cameras, computers, glassware, silverware and so on. It's also worthwhile asking your landlord to put keyed deadlocks on your front and back doors in an effort to reduce your tenant contents insurance premiums as well as boost your security.

Tenant contents insurance policies are varied. Speak with a trusted broker to ensure you get one that best suits your needs. Chances are you'll want a policy that incorporates personal liability insurance, in the event a visitor is injured in your home.

While standard content coverage typically includes fire, storm and rain damage, and accidental breakage of glass in windows and door, optional extras are available from most insurers. These include flood damage, motor burnout and injury to pet dogs and cats. It's also worth noting that some policies exclude jewellery from their standard policies. You may have to pay a higher premium cover it in the event of theft etc.

If the lump-sum cost of an annual insurance payment is prohibitive, there is the option of making monthly payments instead. However, be aware that most monthly plans come with an additional administrative charge. NSW and Victoria also apply a 22 per cent fire levy; while all states charge stamp duty on home insurance. The best way to avoid bill shock is to ask your insurer for an itemised breakdown of all costs involved in insuring your worldly possessions.

General Disclaimer

The information contained in website is general information only and does not constitute legal, financial or compliance advice. As the laws relating to tenancy agreements may have changed we recommend you check with the relevant State or Territory government department. We also recommend that you obtain your own independent legal advice about matters relating to landlord obligations, tenant rights and any legal disputes you may have with a tenant(s).