Renters could be overpaying thousands on their contents insurance, new CHOICE research has found.

Renters insurance, also known as home contents insurance, covers the things you own, like your furniture, clothes, appliances and electronics.

CHOICE found renters could take advantage of hefty savings by shopping around. According to its analysis, a renter in their 30s with contents insured for $50,000 could be overpaying $1,285 per year in Victoria, $1,598 in Western Australia and a whopping $2,574 in the Northern Territory.

• Also read: Budget 2023: Cash splash to help Aussie renters

• Also read: Rents surge $500: 3 tips to deal with price hikes

• Also read: 4 easy ways Aussie renters can save money

Here are five ways to save.

1. Avoid the loyalty penalty

“Insurers generally charge existing customers more than new customers. If you remain with the same insurer, you’ll pay more for your insurance, not less - we call this the loyalty penalty,” CHOICE insurance expert Jodi Bird said.

When your insurance comes up for renewal, make sure you get a couple of quotes from other providers and see if you can get a better deal.

2. Check your cover

Read through your insurance policy and make sure you aren’t paying for cover you don’t actually need.

“Insurers love to offer fancy extras, such as accidental damage or fusion cover, with their policies. These extras are usually unnecessary and you can save some extra cash by not opting into them,” Bird said.

3. Increase your excess

Your excess is the amount of money you have to fork out in the event of a claim. Increasing your excess is an easy way to lower your premium.

“Just make sure you’re comfortable with the amount of money you’d need to pay upfront in the event you need to use your insurance and replace your belongings,” Bird said.

4. Bargain hunt

“Many insurers will offer discounts for new customers, so we recommend you get quotes from new insurers and your current one as a new customer,” Bird said.

“If the discount your existing insurer offers matches or beats the competitor’s prices, tell your insurer to provide it, or they will lose a customer.”

You could also score a discount by opting to pay annually rather than monthly, or taking out other policies with the same insurer.

5. Do you really need insurance?

With many Aussie renters feeling the pinch from rent hikes and the cost of living, you may be wondering whether you even need renters insurance.

“We don’t recommend cancelling your contents insurance, as your belongings can add up to much more than you realise,” Bird said.

“Shopping around for the best deal and increasing your excess will save you money and ensure your possessions are covered in the event of an emergency.”

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