How much does home and contents insurance cost?

The cost of home and contents insurance is the price you’ll pay to protect not only the bricks and mortar of your house but your and your family’s personal treasures within it. But with so many factors to consider, this will vary for each customer and each property insured.

When you buy a home and contents insurance policy, your insurer will consider a range of factors when calculating your monthly premium, including your circumstances, house value, what your level of cover includes (e.g. vandalism, legal liability, natural disasters, temporary accommodation) and more.

Here are just some of the things that can affect your home and contents insurance cost.

On this page

• The sum insured
• Your excess
• Other factors that affect the cost of home and contents insurance
• Frequently asked questions

The sum insured

The maximum amount you may receive for a total loss insurance claim on your home and contents insurance (minus any excess you owe) is commonly known as the sum insured.

Your sum insured amount should be sufficient enough to cover replacement or rebuilding costs for your home and possessions; otherwise, you’ll risk underinsurance, which could leave you out of pocket.

Should the sum insured payout for my home equate to its estimated value?

Not necessarily. While the estimated value of your home should be a basis for your sum insured, there are a couple of things to consider.

Firstly, your sum insured amount doesn’t need to include your land value since it’s more likely that you’ll only need to replace your home, not the land it’s on.

For example, while some properties in Sydney might be worth several million dollars, the home building itself may only cost $500,000 to rebuild, so the sum insured amount on your home insurance policy will only need to reflect the rebuild figure.

Secondly, depending on where you live you may need to consider insuring your home for a sum that exceeds the market value of the property.

For example, in a very remote town, a property might be worth $300,000, but the home could cost $400,000 to fully replace.

Insuring your home for just its current value won’t take into account other rebuilding or material costs that you would then have to pay out of your pocket.

Lastly, when you insure your home, you’ll need to calculate the replacement value of the whole structure and associated outbuildings (like garages) as accurately as possible. This is something that many people forget to factor into their sum insured.

You’ll also need to make sure your contents insurance covers your belongings in your home. If you own particularly precious items, you might want to consider taking out additional portable contents cover for your valuables, so you’re covered for the replacement costs of your high-value belongings that you may take outside of your home.

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Your excess

Excess refers to the sum you have to pay when you claim on your policy.

Insurance policies will 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.

Depending on your insurer, you may have the option to increase your excess amount in exchange for a lower insurance premium. Just bear in mind that you’ll need to pay this amount should you ever claim.

Will I have to pay multiple excesses?

While a basic excess will apply whenever you make a claim (depending on the circumstances), you may have different applicable excesses to pay.

For example, if you’re claiming for an insured event like an earthquake or flood, you may have to pay the basic excess as well as the excess for that specific event. Or, if you’re claiming for an optional cover (e.g. electric motors), an additional excess may apply.

Your certificate of insurance and the relevant Product Disclosure Statement (PDS) will list the full details of your excess payments, as well as other information about your policy.