Home insurance in Victoria (VIC)

Home insurance (also known as building insurance) is a type of home insurance designed to provide financial protection against damage to the insured building. This will typically also include any garages or carports at the insured address.

Building insurance generally covers the structural elements of a building, like walls, windows, and doors. If you have a building insurance policy, the belongings and contents inside the building won’t be insured.

If you don’t need to insure a building, but want to insure the belongings inside it, a standalone contents insurance (also known as renters insurance) policy may suit you.

Contents insurance is designed to provide financial protection against the damage, theft, or loss of belongings and valuables. This can make it a good option for renters (hence the name), and anyone else who doesn’t own a building but wants to insure its contents.

If you need to insure both a building and its contents, a combined home and contents policy could be the appropriate category of insurance cover for you.

A combined policy is usually taken out by residential homeowners, who typically own their insured building and its contents.

Landlord insurance is, as the name says, a type of home insurance policy designed for landlords (i.e. those who own and rent out an investment property). It can provide cover against damage or vandalism to the owner’s building, along with the landlords’ furniture and fixtures at the insured address.

Landlord insurance can also provide cover for loss of rent due to tenant default. Just like residential homeowners, landlords have the option of taking out standalone building or contents insurance policies, or combing the two into a landlord home and contents insurance policy.

If you own or manage a building with rental units or are part of a shared land strata scheme via a body corporate, you’ll typically need to take out a strata insurance policy rather than typical home and contents insurance.

Strata insurance can provide cover for an entire building or shared piece of land, as well as loss of rent and temporary accommodation costs if a unit cannot be lived in following an insured incident.

If you take out home insurance in Victoria (or anywhere in Australia), you’ll typically be covered for damages to your building and/or contents due to the following insured events:

• Storm and rainwater damage
• Fire and smoke damage
• Theft or attempted theft
• Escape of liquid causing damage
• Lightning damage
• Explosion damage
• Earthquake or tsunami damage
• Breakage of glass causing damage.

Additionally, depending on the policy you’re looking at, you may be able to add some or all of the following optional covers to your policy for an extra cost:

Always read the relevant Product Disclosure Statement (PDS) for any insurance policy you’re considering for full details on inclusions, exclusions and annual limits. The Target Market Determination (TMD) could also guide you on whether the product is right for you.

The cost of home and contents insurance in Victoria will vary based on a range of factors, including:

• The level of cover you choose. Building insurance typically costs more than contents insurance, and a combined home and contents insurance policy costs more than either standalone option. If you add optional cover to your policy, this will increase your premium.
• Where the building is located. Different parts of Victoria will have a higher insurance risk rating than others based on the risk of flooding, being damaged by a bushfire or the likelihood of a break-in or theft claim. If you live in an area with a high risk rating, your insurance premium will be higher.
• Your chosen sum insured. The amount you elect for your home building sum insured will be the estimated cost to rebuild your home, and any structural improvements on the site, and for contents the sum insured will be the cost to replace all your belongings kept at the site.

Flood insurance isn’t a compulsory home insurance inclusion in Victoria, but many insurers will include it as part of their standard home and/or contents insurance policies regardless. However, your area’s perceived flood risk may affect the cost of your premiums.

If you live in an area that isn’t considered ‘at risk’ when it comes to flooding, you may be able to remove flood cover from your policy, and subsequently reduce the cost of your home and contents insurance premium. This is commonly referred to as ‘opt-out flood cover’.

If you take out home insurance in Victoria or anywhere else in Australia, you’ll typically have cover for damage or loss caused by bushfire as a standard inclusion. That being said, your area’s perceived bushfire risk could affect the cost of your insurance premiums.

If you live in a bushfire-prone area, you’ll want to be adequately covered for fire damage, and have nominated an insured amount that will be enough to fully replace your building and belongings in the event of a bushfire.