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First of all: What is home insurance?

Home insurance covers the financial side of things when your home is damaged by storms, bushfires and more. It can cover various types of buildings, like standalone houses or apartment units.

A home insurance policy is specifically for the building you call home and its fixtures, which is why it’s sometimes called building insurance. Your personal items (like clothing, furniture, appliances and devices) are covered by contents insurance.

You can also combine home and contents insurance into one policy that covers both.

Types of insurance for your home

There are different types of cover that can suit the needs of different homes and homeowners, including owner occupiers, landlords and renters.

Home insurance

Home insurance cover is specifically for the building that you live in (and sometimes sheds, garages and other outbuildings as well). It provides you with financial cover should your home be damaged by any of the events listed on your policy. Owner-occupiers can have a combined home and contents insurance policy for a broader range of cover.
Learn more.

Contents insurance

A contents insurance policy will cover your personal effects and valuables if they’re damaged, destroyed or stolen. Some policies even cover portable contents, like laptops and mobile phones, while they’re out of the house.
Learn more.

Landlord insurance

Landlord insurance policies are similar to home insurance in that they cover the building, but also include several features specific to landlords. Depending on your policy, landlord’s insurance can also protect against loss of rent, tenant defaults and legal action.
Learn more.

Renters insurance

Renters insurance (or contents-only cover) is taken out by tenants to protect their belongings (such as computers, clothing, jewellery, appliances and furniture) in their rental home.
Learn more.

What home insurance covers you for

Home insurance can cover your abode for a range of scenarios. Different home insurance policies may have slightly different inclusions as well as monetary limits on what you’re covered for. We list a range of common benefits in home insurance below, plus some typical exclusions that you won’t likely be covered for.

Scenario Coverage
Storm damageYes
Fire damageYes, excluding damage from cigarette smoking, scorching or melting
Flood damageYes, but this may be an optional extra
Movement of the seaNo
Impact damageYes, but deliberate damage is not covered
Falling treesYes, excluding damage from tree lopping
Motor burnoutYes, but may be an optional extra
Damage from verminNo. This also includes damage from rodents and insects
War and uprisingNo
Accidental damage to glass and ceramicsYes, but this may be an optional extra
Loss of liquidYes, but doesn’t cover the repair or replacement cost of the item that caused the loss (such as a burst pipe) or the cost of the escaped liquid.
Removing debrisYes
Damage from renovationsNo
Temporary accommodationYes, if the home is uninhabitable while being repaired after an event
N.B. Some events such as flood damage may be an optional extra or a separate policy you can purchase alongside building and contents insurance. Limits and additional exclusions may apply.

Always check the relevant Product Disclosure Statement (PDS) for any insurance policy before you buy to see the full details of what’s covered.

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What optional cover can do for your home

Flood cover

Flood cover helps takes care of the cost of repairs, rebuilding or a total loss on your home if it’s damaged by floodwaters. Most home insurance doesn’t come with flood cover as standard, but insurers will likely offer it as an optional extra instead.

Accidental damage cover

Accidental damage cover helps protect your home against mishaps that might not be due to a listed event in a standard policy. Adding this optional cover can help provide a wider financial safety net against accidental damage to the home which can happen as part of everyday life.

Motor burnout cover

Adding motor burnout cover to your home insurance policy can help pay for repairs and replacement costs for fixtures like washing machines and aircon units if the electric motors within break due things like power surge or electric current.

Frequently asked questions about home insurance

Why do I need home insurance?

There are several reasons why you should consider home insurance for your house:

  • It provides a financial safety net. If your home was damaged and needed to be repaired (or completely rebuilt), would you be able to afford the costs to fix it yourself? Home insurance helps cover the cost of rebuilding or repairing your home if it’s damaged in an insured event.
  • Home insurance is often a requirement for a mortgage. Should you need to borrow money to buy a home, your lender may require that you get a Certificate of Insurance before you move into your new place.
  • Peace of mind for the little (and big) things. Having home insurance can bring a sense of relief and security knowing you’re covered for things like storm and weather damage, vandalism, malicious damage, legal liability and the cost of temporary accommodation if your home is unliveable while repairs are underway.

What are home insurance exclusions?

Exclusions are things your insurance provider won’t cover you for. This can include using your building as a holiday house, renting it out to short-term guests and renovations gone wrong. Check out our list of common home insurance exclusions here.

How much does home insurance cost?

The cost of home insurance in Australia varies greatly for each household and is based on a variety of factors, including:

  • How much you insure the home for
  • The home’s location
  • What materials the home is made of
  • Your excess payment.

Generally, the riskier the location (based on a history of storms, fire, floods and crime rates), the more it will likely cost to insure. There is a whole host of factors that can all influence the price of home insurance, though, which you can read about in more detail here.

Remember: You need to insure the home building for its replacement value in today’s money. A home that cost $200,000 to build twenty years ago may cost a lot more to rebuild now. If you don’t set the level of cover accurately and need to make a claim, you’ll need to pay for the difference yourself.

Is there a way to make home insurance cheaper?

There are a few things you can do if you’re looking to make your home insurance cost less, including:

  • Adding security features to your home. This can reduce the risk of damage associated with theft and you may be able to get a slightly cheaper premium
  • Choosing a higher excess payment. Insurers usually recognise this by reducing your premiums in turn. Keep in mind if you do make an insurance claim, you may have to pay this amount.
  • Buying online. Many insurers offer a small discount if you purchase a new policy online.
  • Paying your insurance premium annually. A bulk payment for the whole year will usually come out cheaper than paying your premium month by month.
  • Bundling your policies. If you need to purchase another type of insurance product (like car insurance or pet insurance), your current home insurance provider may give you a discount if you take out those policies with them as well.

Can I get home insurance for an apartment?

You can get home insurance for an apartment. If your building is run by a body corporate, they’ll likely have a strata insurance policy in place, which covers the physical structure of the building. However, it may not necessarily cover the fixtures and interior walls of your flat. Home insurance can be beneficial in providing greater coverage, as long as you own the apartment; if you do not own it, contents insurance may be more suitable.

Who can make an insurance claim for my home?

The policyholders – typically yourself or whoever owns the home – can make a claim on your home insurance if there’s been an incident. If you wish to add someone else to your policy as a joint policy holder (e.g. a partner or parent) so they can also claim if necessary, you may need to contact your insurer to make the change.

Can you get home insurance for a house under construction?

If you’re building a house, you can’t get a home insurance policy until the construction is complete. While the building is under construction, the builders’ own insurance will pay for damages and incidents that occur. Be sure to inquire with the builder about their legal liability and insurance policy before you hire them.

If my home needs repairs, how long is the replacement guaranteed for?

Most home insurance policies provide a lifetime guarantee on the cost of repairs or new-for-old replacements, where a new fixture is installed following an insurance claim.

Stephen Zeller, General Manager

Meet our home insurance expert, Stephen Zeller

As the General Manager of General Insurance at Compare the Market, Stephen Zeller works to make the protection of a homeowners most significant financial assets, an easier and more efficient process. Stephen empowers people with choice and believes it’s important to have adequate cover in the event of the unexpected – fire, flood, storm, or vandalism.

Stephen has more than 30 years of experience in the financial services industry. He is an Allied member of the Australian and New Zealand Institute of Insurance and Finance (ANZIIF) and ensures any information about insurance products that we publish is accurate and comprehensive.

Stephen’s home insurance tips:

  1. Make sure to include the replacement cost of all out-buildings into your sum insured.
  2. Let your insurer know if you’re running a business from the home. Insurers are generally more conservative when it comes to issuing policies for homes that are used as a business premise.
  3. Make sure you read the PDS. There are limits, exclusions and conditions of cover that will apply to every policy, so check that these meet your needs.
  4. Tell your insurer if you will be renovating to the home. You’ll need to update the sum insured in your policy once work is complete too.
  5. You don’t have to wait for your renewal notice to save money; you can cancel your existing policies at any time and switch insurers. Just be aware of any cancellation fees that may apply. If you have paid your premium in full, your insurer may provide you a pro-rata refund for the remaining period of your cover.

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