Your home is more than just bricks and mortar or plaster and plyboard; it’s your sanctuary, your castle. You fill it with memories and mementos, the treasures of a life well-lived. You carefully furnish it and surround yourself with creature comforts that suit your lifestyle.
Whether fancy, frilly or frugal, your home and the items within it are valuable assets worthy of insuring.
On this page, we’ll explain how home and contents insurance work and what it covers.
If something went horribly wrong and you needed to rebuild your entire home (for example, after a bushfire), would you be able to pay for that out of your own pocket?
The total value of all your possessions might surprise you. Likewise, our homes are one of the most important (and expensive financial assets) we can own; and rebuilding a house isn’t cheap.
This is why you should consider purchasing home and contents insurance.
Having home insurance means that the financial cost of replacing your home and contents are covered if they are damaged or destroyed by a specific event covered by the policy. Your insurance provider will help organise and pay for repairs and rebuilding costs, providing you with peace of mind knowing that assistance is available in what would be a stressful time for anyone.
It’s the same for the contents inside your home; if they’re stolen, damaged or destroyed, the cost can be covered, sparing you from paying all that money again to purchase replacements or pay for repairs.
Home and contents insurance policies differ between insurers, so it’s important to know what each one covers to choose the one that’s best suited to your living situation. Every policy type offers something slightly different, so make sure you read the policy details with care.
You can take out home insurance, contents insurance or a combined home and contents insurance policy. The type of policy you choose will depend on your needs and budget.
Home insurance covers the big stuff like the bricks and mortar of your house. It covers your roof, fences and the structures of your outbuildings (like sheds and garages) too. Home insurance protects you against things like fire, flood, damage, loss and theft related to the physical structure of your house/property. Check your policy details in the Product Disclosure Statement (PDS) carefully; sometimes flood and other disaster events need to be specified when you take out the policy and may need to be purchased as an additional extra.
Anyone who owns a property should consider home insurance in some form. However, home insurance may be a little different for those with a strata-titled property. If you own a home in a strata complex (such as an apartment, unit or townhouse), home insurance is typically provided through your strata levies; check with your body corporate or strata manager when you move in.
If you own a property and rent it out, you’ll want to look into landlords insurance instead. Landlords insurance is specially tailored insurance that may cover your property for events like fire, flood and damage, as well as malicious damage, theft and loss of rental income due to tenant default. Landlords insurance may also cover you for your appliances within the investment property.
If you’re renting a house, you don’t need to worry about home insurance – that’s your landlord’s responsibility. However, contents insurance for renters is still very important!
Remember, whether you own or rent, home insurance will not cover you for the belongings inside your home. To make sure your belongings are covered, you’ll need contents insurance.
Contents insurance covers the things inside your home, such as appliances, furniture, electronics, and jewellery. It’s designed to protect your belongings if they are damaged, destroyed or stolen. However, each policy provider does offer cover for varying incidents and events, so make sure you read the fine print so that you know whether or not your belongings will be thoroughly covered.
Whether renting or owning, anyone can benefit from taking out a contents insurance policy.
Remember that contents insurance will not cover you for any damage to the physical structure of your house or associated outbuildings, like garages, carports and sheds. For that, you’ll need a home insurance policy.
If you want to cover the contents that you take out of the home, you will need to add portable contents (also called personal effects) cover to your contents insurance.
The best way to ensure that your home and contents are fully protected against damage, loss or theft is to take out both home and contents insurance. You can do this through a combined home and contents policy with one provider, or you can shop around and take out separate policies. Some providers will offer discounts for those taking out combined policies too.
How much and what type of cover you need will depend on your individual circumstances and budget; these factors will, in turn, determine your premium.
For home insurance, you should make sure that you insure the structure and associated outbuildings for the amount required to rebuild all of it if it was completely destroyed. Not doing so could put you at risk of underinsurance, meaning you might not receive the full amount you need to rebuild if you claim.
If you’ve taken out a mortgage to purchase your home, you may be required by your lender to take out home insurance as a condition of your finance approval. This protects the lender in the event that the asset (the house) is damaged or destroyed.
For contents insurance, you’ll need to think about all the things inside your home that you would need to replace if they were damaged or destroyed. Again, you don’t want to risk underinsuring your belongings.
Keep in mind that your provider may have per-item limits for each insured category, so if you have items of particularly high value (like tablets, computers, bicycles, antique furniture, art or jewellery), make sure you look at these limits. You may need to take out specified item cover for increased coverage limits at an additional premium to make sure these items are adequately covered.
You’ll probably add to your contents as life goes on, or you might want to give your house a facelift with some renovations. If so, make sure you update your home and contents insurance regularly to avoid being underinsured. Underinsuring is a huge risk to your home and your belongings, so it’s a good idea to review your home and contents amounts annually.
There are many home and contents insurance providers and options available, so make sure you compare them to get a policy that’s tailored to your lifestyle and needs. Whatever your life stage or situation, it’s important to protect your home and belongings for which you’ve worked so hard.
Start your insurance journey today with our free comparison service. It takes only minutes to compare your options and protect your home and possessions!