Things to Know About Home and Content Insurance

Home insurance

Home insurance helps protect you against things that are out of your control, such as damage from natural disasters like storms and bushfires.

Home insurance covers the cost of replacing or repairing your home, including fixtures (i.e. the building and fittings such as lights).

Choosing home insurance

Almost all home owners need home insurance and are required to have it as part of their home loan arrangements. Could you afford to rebuild your home if it was destroyed?

Most insurers offer home and contents insurance as a package. Always shop around for the right level of cover at the best price. It's as simple as phoning three insurance companies or visiting three websites.

Total replacement vs sum-insured cover

You need to work out if you want 'total replacement' cover or 'sum-insured' cover. Total replacement cover includes all the costs to rebuild your home to the standard it was prior to an event.

Sum-insured cover is more common and will cover you up to a set amount. There are a number of variations to these two basic models, so read the fine print and ask as many questions as possible when comparing insurers.

Contents insurance

Contents insurance covers the cost of replacing or repairing your unfixed household items and possessions. This includes furniture, clothes, appliances and jewellery.

When working out how much home and contents insurance you need, start by listing all your belongings and working out how much it would cost to replace them. Taking photos and doing it room by room is sensible because you may be surprised by how much you have.

Choosing contents insurance

The type of cover you choose will affect the premium you pay. Some policies cover you for defined events (e.g. burglary and fire) while others cover you for any accidental event. Others give you only limited cover if you take an item (e.g. a laptop) outside your home.

There are two main types of contents insurance:

  • policies that cover the value of your stuff
  • policies that replace your stuff with new items e.g. 'new for old'

'New for old' policies tend to be more expensive. Work out what type of cover you want and weigh up the costs.

You can save money on contents insurance by choosing a higher excess. For example, if you could pay the first $1,000 of any loss, the insurance premium will be cheaper.

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