Student guide to contents insurance

Author: Kevin McHugh, Head of Publishing at Banked.

What does contents insurance cover?

Contents insurance pays out compensation to repair or replace your things if they are lost or damaged. For example, if you dropped your laptop down the stairs and it broke, contents insurance would cover the cost to fix it or get a new one.

But contents insurance covers more than just technology. If you’re living in a hall of residence or you’re flatting with friends, contents insurance covers everything you bring with you — from your clothes, mobile devices, bike, and so on.

Some contents insurance policies can also compensate you if your debit or credit card is used by someone for illegal activity (and if your card provider won’t cover the cost for some reason).

See our more general guide to contents insurance to see how it differs from house insurance.

Are you an international student? Some of your things may already be covered under your health and travel insurance policy.

Contents insurance covers more than just your things

Another major benefit of contents insurance is that it covers you for damage you accidentally cause to a property you are renting. In the case of many students, this will be a hall of residence or a flatshare with friends.

Here are some examples of property damage that a contents insurance policy can cover:

• You forget you have something cooking on the stove. The pan burns, causing damage to the oven, nearby walls, and smoke damage to other areas of the kitchen.
• You accidentally put a hole in the wall when moving a piece of furniture into your new flat.
• You leave a tap running by mistake causing water damage to your flat and the flat below.

Damage accidentally caused to property can be very expensive to fix, but content insurance can cover this cost.

Note that property damage is usually not covered by more basic contents insurance policies, so check any policy that you’re considering carefully before buying.

Is ‘renters insurance’ the same as contents insurance?

Yes. Several insurance companies advertise ‘renters insurance’ on their websites, but this is just another term for contents insurance that is designed to sound more relevant to renters and students (instead of homeowners).

Policies presented as renters insurance are exactly the same as that insurer’s contents policies. They cover the same things and come at the same price.

Do students need contents insurance?

There is no legal requirement for students to have contents insurance.

Like most forms of insurance, you must make a decision about whether the risk of not having contents insurance is worth the saving.

However, contents insurance is one of the cheapest forms of insurance there is so before making that decision it is certainly worth taking 10 minutes to get some quotes before you make that decision.

Getting on a parent’s contents insurance policy

Does an immediate family member that you live with back home have a contents insurance policy? Then you may already be covered (to some degree).

Many contents insurance policies cover the possessions of family members who normally live in the same home but are living away temporarily in student accommodation. This includes students who are away at university, a polytechnic, or other tertiary institution.

But exactly what you are covered for and in what circumstances can vary with insurer and policy. Here is a look at what some popular insurers cover in their policies.

• AMI: AMI’s Advanced and Premier policies cover the possessions of students living away from home for study for up to $1,000 per item and up to $5,000 in total. However, they are not covered for items that are lost or stolen. Some restrictions apply if the student is flatting, rather than living in student accommodation. Learn more on the AMI website.
• Tower: All of Tower’s policies cover students living away with more expensive policies offering greater cover. The cover only applies to students living in student accommodation. Learn more on the Tower website.
• AA Insurance: AA Insurance ‘Contents insurance’ policy (not its ‘Limited contents insurance’ policy) covers children living away at an educational institution. Again, this does not include students who are flatting. Learn more on the AA Insurance website.

If you are looking to get cover under an immediate family member’s policy, make sure that you understand what it does and does not cover first.

How students can get the cheapest contents insurance

Unfortunately, there are no student discounts for contents insurance in NZ, but there are still lots of ways to get cheaper cover.

Compare, compare, compare

Different insurers have slightly different ways of pricing contents insurance. This means there isn’t a single ‘cheapest insurer’ for all people and the insurer that provides the best price for someone else will be different to the one that provides the best price for you.

For example, our research into New Zealand’s insurance poverty premium found that the cost of contents insurance can differ by hundreds of dollars between people insuring exactly the same things but living in different areas.

This means you should compare quotes from multiple insurers to find the lowest price for you. This might sound time-consuming but you can get quotes from multiple insurers in less than 10 minutes and it might result in a huge saving.

Check out our contents insurance guide now and start comparing quotes.

Bundle your contents insurance with your car insurance

If you have a car while studying, you can save a lot by bundling your car insurance and contents insurance together with the same insurer.

Most insurance providers offer a multi-policy discount for customers who take out more than one policy and the saving can be as much as 20% off both policies.

If you’re looking for ways to save on car insurance, check out our student guide to car insurance in NZ.

Pay for your insurance annually

Most insurers offer a discount for customers who pay for a year’s cover upfront, rather than fortnightly or monthly instalments.

Paying for insurance in one lump sum may not be an option for many cash-strapped students, but if you are able to do it you could save around 7%.

Note that the exact discount can vary a little from insurer to insurer.

Choose a less expensive policy type

Most insurance providers offer different tiers of cover. More expensive policies offer greater coverage and benefits while more basic options will let you save money.

A key difference between cheaper and more expensive policy types is the compensation you will get if your things are lost or damaged.

Pricier, more comprehensive policies will replace your things on a new-for-old basis. For example, if your three-year-old laptop was stolen, your policy would pay out for a new laptop of similar specs. But a more basic policy will only cover it for the value it had at the time it was stolen.

If you’re happy with a policy with lower coverage, it can be a good way to cut back on insurance costs while still ensuring you’re covered if the worst happens.