How much does home and contents insurance cost?
Expert tips for saving on your home and contents insurance premiums
Our home insurance expert, Adrian Taylor, has these helpful tips for managing the cost of your home and contents insurance policy:
Adrian Taylor
Chief Executive – General Insurance
Get an estimate
If you’re unsure how much to insure your property for, you could get a builder or valuer to provide an estimate. A professional valuation can help you select a more accurate sum insured. If you compare quotes through Compare the Market, our calculator can help guide your sum insured amount.
Don't rule out smaller brands
Don’t overlook the lesser-known insurance brands. These ‘challenger’ brands are often backed by well-known underwriters, and in a highly regulated industry, these insurers can provide you with considerable peace of mind and in many cases, cheaper prices.
It pays to be honest
Make sure you’re honest when signing up for your policy, and keep your insurer updated if your circumstances change. Failing to disclose important information could mean your insurance provider may reject a claim and cancel your policy.
How much is home and contents insurance?
According to Compare the Market quote data for the 2026 financial year, the average annual premiums are $1,685 for home building insurance, $445 for contents insurance and $1,990 for combined home and contents insurance. Home and contents insurance is an umbrella term that includes home building insurance, contents insurance, combined home and contents insurance, and landlord insurance.
What affects the cost of home and contents insurance?
The amount you pay will depend on a range of factors insurers consider when calculating premiums, including your sum insured, excess, location and:
- Type of cover. Buying a home insurance policy (also known as combined home and contents insurance) will typically cost more than contents-only cover or a standalone home building insurance policy.
- Your level of cover. Your home and contents insurance premiums will be affected by the level of cover you choose. A policy that includes more benefits, covers a broader range of events, such as vandalism, tsunamis and earthquakes, and has higher legal liability coverage limits will cost more.
- Any optional extras you add. Insurers often have extra cover available that you can choose to add to your policies, usually for an additional cost. This could include insurance for portable items (like mobile phones and laptops) and accidental damage. Landlord insurance may also offer optional cover for malicious damage by tenants.
- Your suburb’s crime rate. If there’s a lot of crime in your neighbourhood, like break-ins and burglaries, your insurer may charge a higher premium.
- Natural hazard risk. Your suburb’s risk of natural disasters (such as floods, storms or bushfires) influences the cost of insurance. The higher the risk perceived by your insurance company, the higher your premium may be.
- Home security. If you reduce your risk of theft in and around the home (e.g. installing alarm systems, adding deadbolts on doors and windows), this could reduce your home and contents insurance premium.
- Age and structure of your property. Your insurer will consider your property’s age, construction materials and sturdiness to determine how likely it is to withstand severe damage and how much it might cost to replace.
- How the home is used. Your premiums may be calculated differently depending on how you use your home, such as if you conduct business from your property or rent it out.
- Any government charges. Your premium may be impacted by government taxes and state- or territory-based stamp duties or levies (such as the Emergency Services Levy).
When you buy home and contents insurance in Australia, your insurer is required by law to supply a key facts sheet, which outlines the events your policy does and doesn’t cover.
Along with this document, you should thoroughly read through the relevant Product Disclosure Statement (PDS), which lists the policy’s terms, conditions, inclusions and exclusions. The Target Market Determination could also help you understand whether the policy is suitable for you.
How can I lower my home and contents insurance cost?
You can lower your home and contents insurance premiums by taking steps such as bundling your policies, choosing to pay annually instead of monthly and reviewing your policies before each renewal instead of automatically accepting a higher premium. You can also reduce your premium in these ways:
- Choose a higher policy excess. This could reduce your premiums, but keep in mind that if you do claim, you will have a higher excess to pay. Before increasing your excess, consider whether you can afford it if you need to claim.
- Don’t make small or unnecessary claims. Avoiding minor claims where possible can help you maintain a stronger claims record and qualify for no-claim bonuses offered by many insurers.
- List your security measures. Adding security features to your home can lower your premium, so it’s a good idea to notify your insurance provider if you’ve had them installed.
- Seek out online discounts. Most insurance providers apply discounts to the first year of your policy if you buy online. You could also get discounts when you compare and buy through Compare the Market.
What is a home and contents sum insured?
Whatever type of home and contents policy you have, the sum insured is the maximum amount you may receive after lodging an accepted insurance claim if your property is destroyed. For home building insurance, your sum insured should be sufficient to cover full replacement and rebuilding costs for your home, and for contents insurance, it should be sufficient to cover the replacement costs of your possessions. Otherwise, you could risk being underinsured, which can leave you out of pocket.
Should the sum insured payout for my home equal its estimated value?
No. The sum insured payout is calculated based on the cost to rebuild your home, not its market value. This is because the sum insured doesn’t include the value of the land, only the cost to repair or rebuild the house, such as materials, labour, demolition and removal of debris.
Some other things to consider when calculating your sum insured:
- Building materials: The materials used to build your home, such as brick, timber or steel, can affect rebuilding costs.
- Your home’s features: Number of bedrooms, bathrooms, special fixtures, and associated outbuildings (such as garages).
- Your location: Where your home is can influence labour and material costs. Properties in flood-prone areas may be more expensive to rebuild.
To reduce the risk of being underinsured, the Insurance Council of Australia recommends avoiding guesswork when setting your sum insured. A home building insurance calculator can help you estimate rebuilding and replacement costs more accurately. If you compare quotes through Compare the Market, our calculator can help guide your sum insured amount.
What is excess in home and contents insurance?
Excess refers to the sum your insurer may ask you to pay when you claim on your policy. Basically, it’s your contribution to the repair bill. For example, if your excess is $800 and a storm causes $9,000 worth of damage to your home, you would pay the first $800 and your insurer would cover the remaining $8,200, provided the claim is covered under your policy. If the repair costs less than your chosen excess, you’ll usually pay the full repair bill yourself.
Insurance policies usually have a basic or standard excess, which applies to most claims. If you have combined home and contents insurance, your policy may have separate excesses for home claims and contents claims. However, if you’re claiming for both your building and contents and the loss was caused by the same insured event, you’ll generally only need to pay one excess, which will usually be the higher of the two.
Keep in mind that some situations may have an additional excess on top of your basic one. If that applies to your claim, you’ll see it listed on your certificate of insurance.
Will I have to pay multiple excesses?
While a basic excess will typically apply when you make a claim, you may also have other applicable excesses to pay. For example, if you’re claiming for an insured event like an earthquake, you may have to pay the basic excess as well as the excess for that specific event.
Your certificate of insurance and the relevant PDS will list the full details of your excess payments and other policy information.
What is the best excess for home and contents insurance?
Home insurance basic excess amounts can range from $100 to $5,000, and the right amount for you depends on how much you want to pay in your regular insurance premium versus how much you can afford to contribute when you make a claim. If you opt for a higher excess, remember that you will need to pay that amount if you make a claim, which is why it’s important to select an excess you can afford.
Do I need home and contents insurance?
Home and contents insurance is generally not mandatory. However, if you have a mortgage, your lender will usually require you to have home building insurance before your home loan can be settled. If you’re buying a strata-titled property, such as an apartment, the building is typically covered under the strata insurance arranged by the body corporate, so you may not need to take out separate home building insurance.
There are different types of home and contents insurance available, including home building insurance, contents insurance, combined home and contents insurance and landlord insurance. The type of cover that’s right for you will depend on your circumstances, such as the home you live in, the belongings you want to protect, and the level of cover you need.
Do I need home and contents insurance if I buy a new home with a home loan?
You need home building insurance, but not contents insurance, to buy a home with a home loan. Most lenders require proof of home building insurance before settlement. No matter what type of property you’re buying, having home building insurance will usually be a condition for your home loan approval and often you’ll need to provide proof that you have cover before settlement.
However, the insurance requirements can vary depending on the type of property you’re buying. If you’re purchasing a strata-title property such as an apartment, you generally won’t need to arrange separate home building insurance, as the building is usually covered by the strata insurance included in your strata levies.
Meet our home and contents expert, Adrian Taylor
As a General Insurance expert with over 13 years’ experience in financial services, Adrian Taylor works to make it easier for homeowners, renters and landlords to protect their home and contents. He believes it’s important for all residents (whether they rent, own or lease) to have adequate financial cover for their property and belongings in case the worse should happen.