Choosing the right contents insurance policy

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Here you can learn more about the difference between our two contents insurance policies with real life examples to show you what they cover, and which one may be right for you. This is one of a series of articles that cover what you need to know about contents insurance. 

We all want to protect the stuff we own. After all, you never know when the unexpected may happen. A thief may help themself to your new laptop, a flood may damage your flatscreen TV, or you could accidentally spill paint on your new carpet.

But we all have different amounts of stuff, different budgets, different living situations and different attitudes to risk! So it’s good to know AA Insurance have two levels of contents insurance which means you can choose what suits you.

Our Contents Insurance Policy is our most comprehensive policy, which provides cover for accidental loss and damage as well as theft, burglary and bigger events like a storm, fire, flood or natural disaster.

Whereas our Limited Contents Insurance Policy may suit you if you only require cover for the bigger types of events such as burglary, storm, fire, flood or natural disaster. This policy does not cover you for theft or accidental damage. But there is the option to add cover for theft, accidental loss and accidental damage for your mobile phone, and/or laptop/notebook/tablet.

Here’s some examples of different situations to show you how you could be covered (or not) by each policy.

Cover for burglary and theft

Some of us might think burglary and theft is the same, but they are in fact different and are covered differently by insurance policies. So it’s worth taking a minute to understand the difference between the two (it’s also a useful trivia fact you can then impress your friends with later!).

Basically, burglary is when ‘forced entry’ has occurred. This is when a burglar breaks into your house, car or private space without permission. If you have items stolen from you when walking along the street, this is also considered ‘burglary’ as your items were taken from you by force. 

Theft is when someone steals something – usually in an opportunistic way. For example, a guest you invited to your house party steals something like your phone or laptop. Or you were gardening around the backyard with your front door unlocked, someone slipped in and took items from your house. In all these scenarios there would be no sign of ‘forced entry’ so the event is defined as theft and not burglary.

Let’s see how Ruby could be covered for burglary and theft in the below examples.

Example 1

Ruby comes home to discover her house has been broken into. Many items have been stolen including her favourite jewellery box which contained approximately $4,000 worth of jewellery.

If Ruby has Contents Insurance

Tick icon

Jewellery is covered for this event under the policy, up to $5,000 unless Ruby has already increased her adjustable event limit.

If Ruby has Limited Contents Insurance

Tick icon

Jewellery is covered for this event under the policy, however, cover is limited to $2,500 unless Ruby has already increased her adjustable event limit.

Example 2

Ruby is in a café wearing a bracelet, which is annoying her. She removes the bracelet and places it on the table. When she leaves the café, she forgets to take the bracelet with her. And when she returns, the bracelet has gone.

If Ruby has Contents Insurance

Tick icon

The bracelet is covered for this event under the policy, up to $5,000 unless the limit has been adjusted.

If Ruby has Limited Contents Insurance

Cross icon

The bracelet has been taken in an opportunistic way and not ‘forcibly’ removed, so it’s considered theft. This event is not covered under the policy because her bracelet has not been involved in a burglary, fire, storm, flood or natural disaster.

Contents Insurance

Limited Contents Insurance

Under example 1

Burglary is covered

Burglary is covered

Under example 2

Theft is covered

Theft is NOT covered


Cover for flood and water damage

We’ve had a look at burglary and theft, now let’s see how Tau is covered for water damage.

Example 1

There has been heavy rain, causing a flood and unfortunately water has damaged many of the things in Tau’s home, including his laptop.

If Tau has Contents Insurance

Tick icon

Laptops and tablets are automatically covered for flood and other natural disasters under the policy.

If Tau has Limited Contents Insurance

Tick icon

Laptops and tablets are automatically covered for flood and other natural disasters under the policy.

Example 2

While doing the dishes, Tau accidentally knocks his mobile phone into the sink. It now won’t turn on.

If Tau has Contents Insurance

Tick icon

Cell phones are automatically covered under the policy for accidental water damage.

If Tau has Limited Contents Insurance

Cross icon

Accidental loss and damage is not covered under the policy. However, if Tau has chosen to include the optional benefit ‘Mobile Phone Cover’, his mobile phone will have cover for accidental loss, accidental damage and theft. This means he would be covered for accidental water damage if he has chosen this optional benefit.

Contents Insurance

Limited Contents Insurance

Under example 1

Flood is covered

Flood is covered

Under example 2

Accidental damage is covered

Accidental damage is NOT covered, except when the optional benefit/s ‘Mobile Phone Cover’ and/or ‘Laptop and Tablet Cover’ has/have been chosen


Cover for accidental loss and damage

Lastly, let’s see how Ning can be covered for accidental loss and damage.

Example 1

Ning put his sports bag down at the bus station, accidentally leaving it behind. In the bag was some jewellery and his mobile phone. He has gone back to find it and called the bus company, but it is nowhere to be found.

If Ning has Contents Insurance

Tick icon

Accidental loss is automatically covered under the policy.

If Ning has Limited Contents Insurance

Cross icon

Ning has accidentally lost his gym bag. There is no cover under the policy for accidental loss.

Example 2

Ning tripped while running, damaging his smart watch.

If Ning has Contents Insurance

Tick icon

Accidental damage is automatically covered under the policy.

If Ning has Limited Contents Insurance

Cross icon

Ning has accidentally damaged his smart watch. There is no cover under the policy for accidental damage.

Contents Insurance

Limited Contents Insurance

Under example 1

Accidental loss is covered

Accidental loss is NOT covered, except when the optional benefit/s ‘Mobile Phone Cover’ and/or ‘Laptop and Tablet Cover’ has/have been chosen

Under example 2

Accidental damage is covered

Accidental damage is NOT covered, except when the optional benefit/s ‘Mobile Phone Cover’ and/or ‘Laptop and Tablet Cover’ has/have been chosen


It’s all about weighing up the risk you’re insuring against, the chances of it occurring, and what it would cost to replace the items you have lost. With two levels of contents insurance, optional benefits, adjustable event limits and excesses, AA Insurance offers you the options to personalise your policy and cover the things you care about.

Get the right cover

You can compare our contents insurance policies here or get a quote. If you have any questions or would like to know more, just get in touch.

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