What is contents insurance?

Contents insurance is the policy that covers a household's belongings inside a property: furniture, clothing, electronics, appliances, kitchenware, sporting equipment, jewellery, and personal items. It can be purchased as a stand-alone policy or combined with home insurance into a single home and contents policy at lower total cost.

Contents cover protects against the same broad set of risks as home insurance: fire, theft, burglary, storm, water damage, accidental damage, and vandalism. Most policies pay on a new-for-old basis, meaning damaged or stolen items are replaced with equivalent new ones rather than depreciated cash value, although some lower-cost policies pay only the depreciated value of older items.

The sum insured is the total amount of cover and should reflect the cost of replacing all contents at current prices. Most insurers offer online calculators that estimate the sum insured based on house size, age, and lifestyle. Common items to consider include kitchen appliances and cookware, electronics, beds and bedding, wardrobes of clothes per household member, books, sporting and outdoor equipment, garden tools, hobby items, and personal documents. Specified items above a single-item limit (often 1,500 to 5,000 dollars) usually need to be individually listed and may need a current valuation, particularly for jewellery and watches.

Contents cover is critical for renters, who do not need home or building insurance because the landlord covers the structure. Premiums for renters can be very modest (often 200 to 500 dollars per year) and are an inexpensive way to protect a household from theft, fire, or water damage. Some policies also include personal property cover for items taken outside the home (laptops, bicycles, camping gear, musical instruments) and protection while moving house. Excess amounts, claim limits, and exclusions vary widely between insurers, so comparing Product Disclosure Statements alongside premiums is the standard approach. Disputes are resolved through the insurer's internal complaints process and then through AFCA.