Singling out the right cover: how to obtain single item insurance

Contents insurance can be invaluable when it comes to safeguarding your belongings, but it tends to have limits. It will generally provide cover for the majority of what’s inside your home, like your appliances, furniture and clothing; but when you have a high-value item such as an engagement ring or piece of art, the cost to replace them may outstrip your sum insured per item.

In such cases where you own high-value items and want to ensure you’ll be able to afford the costs of replacing them in the event of theft, fire, flood, or other damage, you may instead want to insure them under a single item insurance rather than lump them in with everything else under a contents policy.

What is single item insurance?

Single item insurance is exactly as it sounds — insurance for a single item. You usually take out this type of insurance if you have a high-value item that may exceed the maximum limit covered under a regular contents insurance policy. This can be for items such as an expensive piece of jewellery, an engagement ring, an art piece, or a bicycle.

There are a few different ways you can go about insuring single items; some of which may be more or less suited to your personal circumstances. To help you decide what’s right for you, we’ve compiled  some options for you.

How do you get insurance for a single item?

Generally speaking, there are two main ways you can insure single items — you can either have cover for them added to a broader contents insurance policy, or some insurers offer a dedicated valuables insurance policy.

Adding cover for specific items to a contents insurance policy

Depending on your contents insurance policy’s terms and conditions, you may be able to list certain items on your policy as specified items and have them insured for their full value rather than your policy’s standard per-item limit. This will generally cause your contents insurance premium to go up, but the total increase will depend on the number of specified items you list and the amounts they’re insured for.

If you’re thinking of taking out a home and contents insurance policy but aren’t sure where to start, you can compare policies with Canstar. Before committing to a particular product, check carefully what options the insurer offers when it comes to including cover for specific items.

Compare Home & Contents Insurance

Taking out an insurance policy for specific items

A number of insurance providers on Canstar’s database, including NRMA and Bendigo Bank, offer insurance policies specifically designed for specified single items. These are sometimes called ‘valuables insurance’ or just ‘single-item insurance’. Many of these policies are underwritten by specialist insurance company Insurance 4 That.

These policies generally provide cover for the same events as standard contents insurance (e.g. fire, theft, damage), but offer the following potential benefits:

• Lower overall premiums as the policy only covers one or a handful of items, rather than most of your belongings
• The ability to obtain cover for items (or obtain a certain amount of cover for an item) that would not be available under a standard contents insurance policy

Which option might be right for me?

Factors that may determine which option is right for you may include:

• Whether you already have contents insurance or not
• The relative cost and level of cover provided by each option
• The convenience of having one policy vs potentially having to take out a second one on top of your existing contents insurance policy

What kind of single items could you insure?

Some of the items you may wish to insure with single-item cover include:

• Laptop or high performance PC
• Smartphone or tablet
• Camera
• Road, triathlon or mountain bike
• Sporting or camping equipment
• Musical instrument
• Jewellery or watch
• Art or sculpture

Moneysmart advises that a single item insurance policy may not provide cover for wear and tear, gradual degradation or if your item or device is used for business or trade purposes. Be sure to read the Product Disclosure Statement (PDS) and check the exclusions of any policy before taking it out.

For example, some single-item insurance policies may require you to pay a higher excess if you make an accidental damage claim.

How much does it cost to insure a single item?

While single item insurance will generally be cheaper than a regular contents insurance policy, the total premium may vary significantly depending on the value of the item(s) you’re looking to insure.

According to Insurance 4 That, the factors taken into consideration when calculating a policy’s premiums include:

• The location of your home
• The cover type and policy options you’ve chosen
• Your item’s pricing factors (the higher the sum insured, the higher the premium, and vice versa)

Insurance 4 That also mentions your premiums also factor in any government charges, taxes or levies that the insurer is obligated to pay, which will be shown on your insurance certificate.

Keep in mind that you may have to pay extra to include portable cover if you want your item to be insured while it’s outside your home.

It’s also important to remember that you’ll generally need to pay an excess in the event of a claim, which you can find the details on in the PDS. It would be a good idea to consider whether the single-item insurance excess for your item exceeds the amount to replace it outright on your own.

Does single item insurance apply outside of your home?

Single item insurance will generally not provide cover for items taken outside of your home by default, but providers normally will offer the option to include portable cover for your items. But, depending on the value of the portable item in question, your insurer may either charge you a significantly higher premium to cover it outside of your home, or refuse to do so.

If you do not have portable cover included in your insurance policy, your insurer will not pay for any claims of damages or loss to you item if the event occurred outside of your home.

It’s also worth noting that you could potentially void your insurance even on items that stay at home. Most home and contents insurance policies will have a list of exclusions or conditions under which they will not pay a claim for certain damages or losses.

Whether single item insurance is appropriate for you will depend on your circumstances and what you’re looking to have insured. Canstar doesn’t compare single item insurance policies, but we do compare contents insurance policies, and you can use the filters available on our comparison table to see which providers allow you to specify cover for single items.

Compare Home & Contents Insurance

Cover image source: Gutesa/Shutterstock.com