First-time home insurance

A beginner's guide to getting the right home insurance for your new and most important investment

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Buying your first home is always super exciting and a little bit confusing. There are so many things to wrap your head around before you even move in. Home insurance is just one of them. We're here to make that part a little easier. This guide will skip all the insurance jargon and give a straight-to-the-point, human explanation of how home insurance really works.

We'll run through the different types of home insurance, what's usually covered and when you should get a policy. We'll even share a few little-known facts to keep things interesting.

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If you're already confident with home insurance, start comparing Finder partners using our table. Click "view details" on the right-hand side to see more info about each policy.

Name Product Building Cover Contents Cover Fire, Storm & Theft Damage Sum Insured Safeguard Online Discount Cheapest way to pay
Budget Direct Home & Contents Insurance
Save 30% on your first year's premium when you purchase a new combined Home & Contents insurance policy online. T&Cs apply.
Youi Building and Contents Insurance
Youi Home Insurance takes the time to tailor a premium for you.
Huddle Comprehensive Home and Contents Insurance
Save up to 20% on your policy in the first year.
ANZ Home & Contents Insurance
Monthly or Annually
The only direct Australian home insurance provider to offer full building replacement cover as a standard feature.
Green Company
QBE Home & Contents Insurance
Save up to 20% on your first years’ premium with a new combined QBE Home and Contents policy online. T&Cs apply.
Seniors Top Home & Contents Insurance
Buy online and save up to 30% on a new home and contents insurance policy. T&Cs apply.
Qantas Home and Contents Insurance
Earn up to 20,000 Qantas Points when you apply. Points awarded will be based on your premium. T&Cs & exclusions apply.

Compare up to 4 providers

What do I need to know before I get started?

We always do our best to avoid any unnecessary jargon but there are a few terms and phrases that regularly pop up when looking for home insurance, so they're worth understanding.

TermWhat it really means
Buildings insuranceCover for the structure of your home but not what's inside it. Insurers will sometimes refer to this as just home insurance
Contents insuranceCover for the things inside your home, but not the actual building. Best for renters or people who have strata insurance
Home and contents insuranceThe combo. Cover for the actual structure of your home, as well as the stuff you keep inside it
PremiumThe price you'll pay for your policy. Usually a monthly or annual fee
ExcessYour out-of-pocket expense if you have to make a claim
PDSThe product disclosure statement: a document with all the info about your policy
Sum insured amountThe maximum payout by your insurer
Total replacementA benefit that means your insurer will cover the total cost of replacing your home, even if it's higher than your sum insured amount
UnderinsuranceA common problem in Australia where people don't take out enough insurance
Insured eventsSpecific events that your home insurance will cover, such as break-ins, falling trees and natural disasters
Sum insured safeguardIf your sum insured ends up being less than the cost to repair, the insurer will increase your sum insured by a certain percentage

How does home insurance work?

Home insurance is designed to cover the cost of repairs if your house is ever damaged or destroyed in an unexpected event. That could be a fallen tree, a heavy storm or even if someone breaks in and steals all your stuff.

You pay a monthly or annual fee – known as a premium – and in exchange your insurance company promises to pick up the bill when something goes wrong.

Be aware though, home insurance won't cover everything. For example, don't expect a payout if you deliberately set your house on fire or if the damage is due to general wear and tear.

If you do ever have to make a claim, you'll have to pay an excess first. This is the amount of money you have to contribute before the insurance company starts helping out. It's usually somewhere between a few hundred and a few thousand dollars but most insurance brands let you set the excess yourself.

Do I really need home insurance?

Probably, yes. Lots of lenders will only issue a fully unconditional mortgage once you have an adequate level of home insurance. Some will ask you to set up home insurance for when you settle, or even before. This means if you're looking for your first house, you should get ready to find home insurance too.

If you buy your home outright, you're not legally required to get home insurance – but you're putting yourself at a massive risk if you don't. You could find yourself footing a bill worth hundreds of thousands of dollars, or suddenly being without anywhere to live.

When should I get home insurance?

You should set up home insurance so you're covered from the moment you become responsible for any damage. This varies between different states so check the list below:

StateWhen will I become responsible for damage?
NTWhen the purchase price is paid or when you're given possession of the property – whichever comes first
QLDAt 5pm on the first business day after the exchange of contracts
NSWOn settlement
ACTOn exchange of contracts
VICOn settlement
TASOn exchange of contracts
SAOn exchange of contracts
WAWhen the purchase price is paid or when you're given possession of the property – whichever comes first

What types of home insurance are there?

There are three main types of home insurance: home, contents and the combination of both.

Buildings insurance

Insurance for the structure of your home, such as the roof and walls. Sometimes called home insurance.

Contents insurance

Insurance for the things inside your home, such as your TV, furniture and artwork.

Home and contents insurance

The combo – cover for your home and everything you keep in it.

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What's usually covered by home insurance?

Most insurers will give you a list of specific events which are covered by your insurance. These are called insured events. You should expect the following events to be covered:

Insured eventExample
Storms and rainwaterHailstones damage your roof, letting rainwater inside
FireAn electrical fault sparks a fire which seriously damages your home
TheftBurglars break into your home and steal your belongings
Malicious damageA vandal graffitis your home and puts dents in your garage door
Escape of liquidA pipe bursts and causes water damage throughout your home
LightningA lightning strike punches a hole through your roof
ExplosionA gas leak causes an explosion and destroys your home
ImpactA tree falls onto your house, damaging the roof and walls
Breakage of glass, ceramic and sanitary featuresA stray cricket ball breaks your window or solar panel
FloodThis one is usually optional, but will cover you if a nearby river or lake bursts its banks and ends up seeping into your home

How to customise your home insurance

Most insurance brands will let you customise your home insurance to create a policy that perfectly suits you. You can add extra features, insure specific items, and even change your excess to reduce the price of your policy. Here's a quick rundown:

  • Accidental damage – Usually an optional extra but sometimes included as standard. It covers mishaps such as a red wine spill or cracked TV screen.
  • Motor burnout – Also known as fusion damage insurance, it covers the repair or replacement of household appliances if the electric motor dies.
  • Flood cover – Sometimes included as standard but usually an optional extra. Particularly important for people living in flood-prone areas.
  • Specified items – If you have any high-value items, they might not be fully covered by a standard policy. However, most insurers will let you include them if you specify what they are.
  • Personal effects – Sometimes called mobile contents insurance, this covers your stuff while you're on the move. So things like your handbag, backpack or phone.
  • Sum insured safeguard – If your sum insured ends up being less than the cost to repair, the insurer will increase your sum insured by a certain percentage
  • Excess – Most insurers let you choose your own excess. Take a higher excess and you'll enjoy cheaper premiums. Just be wary you'll have to pay that if you ever have to make a claim.

What isn't covered by home insurance

Home insurance might be one of the most important safety nets you can ever have, but even safety nets have holes in them. Here are some things to watch out for that probably won't be covered by your home insurance:

❌ Wear and tearPlaster cracks due to the building settling over time
❌ Damage due to neglectYour home floods because you didn't keep your gutters clear
Termites, rodents and verminA termite infestation has compromised the timber joists
AsbestosAsbestos is discovered in your home and extensive work is needed to safely remove it
❌ MouldMould damages your walls and furnishings
❌ Hydrostatic pressureWater leaks into your home due to pressure on your pool walls
❌ DefectsThere is a fault in the design of your home which means it is not safe or habitable

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5 tips for first home buyers

No home insurance policy is perfect for everyone so it can be a frustrating task finding the one that's best for you. Thankfully, our handy tips can help:

Compare your options online. Don't go with a brand just because your mum recommended it. Do the leg work, request a few quotes and compare. It could save you hundreds or even thousands of dollars.

Ask questions until you understand. If you're not sure about something, get in touch with the insurer and ask. It's the best way to figure out exactly what you're covered for and avoid any nasty surprises down the line.

Customise your policy. Look at the optional extras that are offered by an insurer and weigh up whether they're right for you. If you have high-value items, specify them on your policy. Adjust the excess so the regular premium suits your budget.

Look for online deals. Heaps of home insurers offer sign-up deals to new customers which can reduce your premium by as much as 30%. Price isn't everything, but it's certainly a deciding factor so keep your eyes peeled for offers and promotions.

Do it every year. You should compare home insurance brands every year to see if you can get a better deal than you're currently on. Remember, insurers will often hike prices after your first year, so switching could save you serious cash.

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