Is it worth getting contents insurance if you rent?

Whether you're renting alone or with flatmates, find out what contents insurance covers, if you need it and how to get the cheapest deal.

When I spoke to Lachie after the 2023 Auckland Anniversary flood, he told me that he was frugal and never spent much on furniture, so didn’t think contents insurance was worth it until he bought nicer gear.

Contents insurance covers your possessions and is sometimes called renters’ insurance. Everything from your bike to your laptop, clothes and books can be covered if you have a sudden and unexpected loss – like your flat being robbed or damage caused by a fire, vandalism or a natural disaster.

We take you through the price and perks of contents insurance, so you can decide whether it’s worth insuring your belongings as a renter.

Contents insurance quotes for renters

To get a snapshot of the market, we asked seven insurers to give us quotes for comprehensive contents insurance in the five main centres: Auckland, Hamilton, Wellington, Christchurch and Dunedin.

We requested quotes for $35,000 (sum insured) contents insurance for a single 30-year-old who rents with two other young professionals.

The increasing cost of contents insurance

Contents insurance is getting more expensive. In the past 10 years contents insurance has gone up by 48%, according to Statistics NZ Consumer Price Index.

Consumer’s own surveying of contents policies in the five main centres has also found price rises.

The cost of contents insurance has jumped 40% in Wellington since the same time last year. While in Auckland it’s gone up 30%.

While renters in Dunedin have the cheapest contents insurance bills over the five centres we surveyed, it still went up 33%.

In the past 12 months, our surveying has found that of those respondents without contents insurance 18% didn’t renew or cancelled their policy because of the cost.

What we found

Wellington is the most expensive city to get contents insurance. The median price was $881.14 a year, while Dunedin was the cheapest at $487.28.

Auckland was also an expensive region to be insured, with the median cost of a premium $769.84.

Coverage options to consider when renting

The difference in premiums can be down to the different levels of coverage each insurer offers, so it’s best not to decide on your insurer by price alone.

While contents insurance policies cover everyday household items (up to certain limits), such as clothes, computers and mobile phones, they can also provide some cover in case you have to vacate your flat because of a fire or natural disaster.

Cover for temporary accommodation

If you’re a renter and have to find temporary accommodation because of a loss – like a fire or a natural disaster – MAS offers cover of up to $50,000 for temporary accommodation.

While Trade Me will cover the difference between your current and new temporary rent for up to 2 months. AA Insurance will cover the difference in rent for up to 4 weeks.

AMI will cover up to 25% of the sum insured for temporary accommodation, which in our example comes up to $8,750.

Cover for moving and storing your gear

Contents insurance can also cover you if you have to shift your stuff into storage and back into your accommodation after a loss.

You can claim up to $5,000 with Trade Me and Tower, while with AMI it’s up to $2,000.

At AA Insurance, it comes out of the temporary accommodation pot of money. This means you will have less money to pay for any increases in rent, or you will have to choose between claiming for temporary rent increases or the removal and storage of your gear.

Cover for individual items

If you’ve bought a flash bike or have inherited some jewellery it’s best to list these items with your insurer, otherwise you could be caught short if you have to make a claim.

Trade Me will cover the replacement value of a bike up to $5,000, unless it’s specified on the policy that you want to insure it for more. Other insurers offer a higher value; Tower will cover the bike for up to $10,000, while AMI will cover the market value (what it would cost to buy the same bike now).

For jewellery, cover can range from $2,500 to $10,000, unless you specify items on your policy.

It’s good to check the individual limits for claims on other equipment, such as works of art, computers and software, cameras, sport gear, or any collection you may have.

How to get cheaper renters insurance

• Shop around and check out Consumer’s insurance buyers guide or
  check policy details on individual insurers websites.

• Opting for a larger excess can make your premium cheaper. So, instead
  of paying the first $500 on a claim, you could increase it to between
  $750 and $2,500. Just make sure you can afford to stump up the cash if the worst happens.

• It is usually cheaper to pay contents insurance 12 months in advance
  rather than monthly, but it may be easier to spread the cost over the
  year.

Common contents insurance questions for renters

Does my landlord’s insurance cover my stuff?

No. A landlord will have insurance for the property and perhaps some of the appliances in the house if they are supplied with the rental, but not for tenants’ gear.

If I damage the property, will contents insurance cover the damage?

If there is careless damage to the property by a tenant of their guest, the tenant is liable to pay up to 4 weeks rent or the landlord’s insurance excess – whichever is lower.

If you’re paying an income-related rent, it’s up to 4 weeks’ market rent or the insurance excess – whichever is lower.

Most contents insurance policies include a “liability protection” for accidental damage to a property. However, insurers won’t cover deliberate damage.

Will insurance cover my stuff if a flatmate damages my things?

Contents insurance should cover your stuff if your flatmate damages it. But if you damage your flatmate’s stuff, your contents insurance won’t cover it – your flatmate would need their own insurance.

Do I really need contents or renters’ insurance?

To work out whether it is worth it, ask yourself if you could afford to replace all your stuff if disaster struck. If not, it’s worth getting contents insurance.

Your rights when renting

We outline your landlords responsibilities and obligations under the Residential Tenancies Act.

Read more