Your home insurance might cover more than you think

8-minute read

What you'll learn

• Understanding portable contents insurance
• What's typically covered (and where)
• Types of coverage available
• Cost of insuring portable items
• Common exclusions and limitations

 

Did you know that many home insurance providers also offer portable contents as an optional cover to protect items taken out of the home as part of everyday life. Of course, there are costs, limitations and exclusions associated, but let's explore this cover in depth, and why it could be something you might consider.

Portable contents insurance. What is it?

Portable contents cover is designed to insure portable items you regularly take with you when you leave your house. The below list isn’t complete, and there may be financial limitations or conditions attached, but it could include any of the following (and more):

1. Electronic items: Laptops, tablets, mobile phones, cameras and other electronic devices.
2. Sporting equipment: Bicycles, golf clubs and other sports gear (but not whilst in use).
3. Musical instruments: Guitars, violins and other portable instruments.
4. Jewellery and watches: Engagement rings, necklaces, bracelets and watches.
5. Clothing and accessories: Items of clothing, handbags, shoes and other accessories.
6. Other: Any other personal items you might carry with you like sunglasses, your wallet or your keys.

Types of coverage available

Depending on your provider, insurance for portable contents can provide a range of different cover options to insure your personal belongings against theft, accidental loss or damage when you take them outside the house. Depending on what your insurer offers, you may or may not be able to choose from the following:

Accidental damage cover

This covers damage to your items caused by unexpected or unintentional events. Say you were to drop your phone when you were running for the bus and broke the casing and the screen cracked, or you accidentally knock coffee onto your laptop at a café  – these types of damage coverage could be included in portable contents insurance if you add accidental damage cover.
 

It’s important to remember that the definition of accidental damage can vary between insurers, so you need to make sure you understand the specifics of the home and contents policy to see what's covered under your accidental damage insurance cover.

Cover for theft

This provides financial protection if your personal items are stolen while you are away from your house. The policy would typically cover the cost of replacing the stolen items up to a specified limit.
 

Reporting the theft to the police and your home insurance provider will help facilitate a claim – and make sure you’re aware of any conditions of the policy as you may need to provide evidence of proof of forced entry or a police report.

Loss coverage

Ever left your mobile phone or laptop in a taxi? With portable contents insurance you could have loss coverage included, which means you could be covered for the replacement cost if you accidentally lost a personal item.
 

There may be limits on amounts you can claim or there may be certain circumstances under which a loss claim can be made, but your PDS would outline that so make sure you read it thoroughly.

Cover for specified and unspecified items

Many insurers will break their portable contents insurance into ‘listed’ (specified) or ‘unlisted’ (unspecified) portable contents. These are explained below.

• Specified/listed items: This refers to high-value items that you explicitly list on your policy, such as a smart watch or handheld games console, or a designer handbag. Another example might be if you are looking for engagement ring insurance. By specifying these items, you can make sure you are adequately covered for their full insured value. You may need to provide proof of ownership and value with receipts, valuations or photos of the items when you add these to your policy.
• Unspecified/unlisted items: This means general coverage for lower-value items without the need to list each one individually. This provides a more flexible approach to insuring everyday belongings but there may be a per-item limit and/or a total claim limit. This coverage is ideal for items that are frequently carried and used, such as clothing and accessories.

New for old replacement

If this is part of your portable contents insurance coverage you would receive a new replacement item of the same type and quality, rather than a payout based on the item’s depreciated value. This means you could replace your old belongings with brand-new equivalents.
 

Check with your insurer to see if you have this option, whether there are any restrictions or whether it only applies to certain items (or certain situations).

Cover outside Australia

Home insurance with portable contents may cover items stolen, lost or damaged anywhere in Australia, but some insurers will also include coverage for items taken outside the country. The extent of this varies between insurers and policies, and you may be restricted to certain geographical locations or limited periods time.
 

This may also attract an extra premium amount. It’s best to check with your insurer as to what is covered under your home and contents insurance under the portable contents section of your policy.

 

Portable contents, what does it cost?

The cost of premiums for home and contents insurance are calculated based on a number of things. With portable contents insurance, your insurer needs to assess the risk and value of insuring your personal belongings under the following main categories:

Value of the insured items

This plays a significant role in determining your premium. Insuring higher-value items will usually result in higher premiums due to the increased potential payout. If you're considering insuring specific items, it is a good idea to have them regularly professionally revalued to help make the process easier when you make a claim.

Type and number of items

Certain types of items (like high-value electronics, engagement rings or sporting equipment) may have an additional premium due to their increased risk of loss, theft or damage. Another factor that contributes to higher premiums is if you have a large number of items to cover.

Coverage limits

You may be able to customise your limits to cover high-value items, but it's likely that this will affect your premiums. However, it's an important thing to consider if you want to ensure you are covered for the replacement value of important belongings.

Geographical coverage

Policies that cover your portable belongings when you are out of the country are likely to have higher premiums than those that only cover items in Australia. This is due to the increased risk associated with traveling overseas. Some insurers will automatically include this in their policy offering, while others may have it as optional cover.

Policy excess

The excess is the amount you agree to pay out of pocket before the home and contents insurance covers the rest of the claim. Choosing a higher excess may lower your premium because you take on more of the risk. On the flip side, a lower excess (or no excess at all, if available) will almost always increase the premium because the insurer bears more of the risk. See what options are available to you by talking to your insurer.

Exclusions and limitations on cover

While most home contents insurance providers do offer comprehensive protection, when it comes to portable contents you may need to add this as an option to your policy. Remember with portable contents cover, there are things which are fully covered, things which are covered with limits, and things that may not be covered at all – so it’s important to thoroughly research your options.
 

We examine some of the common exclusions and limitations here, but you should check with your own insurer to about which applies to your cover - just to be on the safe side.

Policy limits

Most portable contents policies have limits on the amount that can be claimed for individual items and in total – particularly for unspecified items. You should check your per-item limit and the overall sum insured limit with your home contents insurance provider. If you want to cover specific items at their replacement value, this may also be possible by listing them individually on the policy.

Wear and tear

Damage to your possessions resulting from normal wear and tear is typically excluded from most insurance products. Insurers will only provide cover for insured events that occur during the policy period.

Mechanical or electrical breakdown

This type of event is often excluded unless you have specifically included it as part of the policy. That means if your mobile phone or laptop stops working due to internal failure, it may not be covered.

Intentional damage

While portable contents will cover you for unforeseen mishaps, it is highly unlikely that loss or damage caused intentionally by the policyholder or by someone acting on their behalf is covered. Of course, you should check with your insurance provider for what applies to your situation.

Illegal activities

Most insurers will not cover items used in illegal activities, or those lost or damaged as a result of illegal activities committed by the person who is insured. If you are not sure about your own policy, you should consult the relevant product disclosure statement for more information.

War and terrorism

Similarly to accidental damage cover or natural disaster coverage, damage or loss resulting from war, acts of terrorism, civil commotion or other high-risk events is typically excluded under standard policies.

Unspecified high-value items

If you haven’t specifically listed a high-value item on your policy, it may only have limited coverage. For full coverage, you should specify the item for its insured value on the policy.

Items used for business

If your item is used for business purposes you should check whether it is covered under your portable contents insurance policy. It may need separate cover under a business-specific insurance policy.

 

When it comes to exclusions, this list is not complete. You should check with your insurer about what your individual policy covers. Remember, failing to adhere to policy terms can lead to denial of a claim - so it can pay to play it safe.

In summary

Insuring portable contents can be worth considering if you frequently take valuable items, like a mobile phone, with you when you leave the house. Depending on the options available through your provider, this insurance product can protect you against loss or damage of personal belongings both in Australia and overseas.
 

Because portable contents cover often requires paying an extra premium, depending on your financial situation, you may like to consider whether it is appropriate for your needs.