Get quotes and compare cover
Not sure what these features mean? Here's the lowdown.
- Underinsurance protection: Even if your nominated sum insured (what you value your home to be) isn't enough to repair or replace your building, your insurer will increase it (usually by 10%) so you're not left in the dark.
- Full building replacement: Your insurer will rebuild your entire home if it's destroyed. This feature is only available in a few policies on the market.
- Accidental damage: Most policies will have this as an optional extra. If it's included in your policy, that's good news.
- Flood: It's sometimes actually better to have a policy that lists flood cover as optional. This means that if you don't need to pay for cover you might not need, which may also result in lower premiums.
- Emergency accommodation: This is a pretty standard inclusion across the board, but the limits may vary.
Want to pay more for home insurance? We didn't think so.
So, why do I need it?
Not getting insurance for your home is like riding a motorbike without a helmet - it's just not a good idea. You've been slaving away for years, putting away every penny toward your home, so why wouldn't you take the extra step and make sure it's covered against the worst?
If your home was to catch fire, how much trouble would you be in? If a thief stole your expensive jewellery, how angry would you be? If disaster struck, would you actually be able to afford the expenses that come with it?
No? We couldn't either.
That's why home insurance is such an important thing to have. It protects you against everything from fire and storm damage to burst pipes, falling trees, theft and vandalism. Here's a quick breakdown of why you need it:
It protects your house. Your home is usually the most expensive thing you’ll ever buy and the most valuable asset you’ll ever own. Home building insurance provides protection against an extensive range of risks, guaranteeing that you will be able to repair or rebuild from scratch if an unexpected disaster strikes.
It protects your possessions. Whether it's family heirlooms, your expensive dining room set, or even your Xbox, many of us couldn't live without our possessions. The contents of your home aren't just stuff; they’re often your most important and treasured possessions and can hold just as much sentimental value as they do financial worth. Contents insurance ensures that you will be able to repair or replace your possessions if they’re damaged by fire, storm, theft or a range of other insured events.
It's a home loan requirement. If you take out a mortgage to buy a home, most home loan lenders require you to purchase home insurance before they will approve your application.
Quite simply, it gives you the ultimate peace of mind. The biggest benefit of getting cover is the peace of mind and confidence it provides. With the right policy in place, you can rest assured that you will have the financial support you need should loss, damage or some other unexpected misfortune affect your home or contents.
New to home insurance? Here's what you need to know.
Not sure what you're getting yourself into? That's totally fine! Sometimes it seems that insurance companies try to overcomplicate and confuse their users on purpose. But it's okay. Our guides can help you actually understand home and contents insurance, how it works, and why you shouldn't go without it.
Contents insurance is stand-alone cover for your possessions in the home. This includes jewellery, electronics, carpets, curtains, furniture, appliances, and furnishings. This is a great option for renters or those homeowners who live in an apartment.
This is stand-alone cover for only your home. It also covers other fixtures on your property, such as garages, fences, and sheds. It protects you against a bunch of natural events, such as fire, storm damage, and floods.
What does it cover?
The situations covered by your insurance will vary depending on the insurer you choose and the level of cover you select. However, the best policies generally provide cover against the following:
Fire. If your home and possessions are lost or damaged due to fire, home insurance can provide financial protection.
Storm. You're covered for loss or damage caused by a storm, including violent winds, hail, snow, rain, thunderstorms, cyclones and tornadoes.
Lightning. Loss or damage caused by lightning, or by a power surge caused by lightning.
Flood. Protects you against loss or damage caused by water that has escaped the normal confines of a lake, river, creek or dam, or a number of other bodies of water. Many policies only offer flood cover as an option, not as an automatic inclusion.
Earthquake and tsunami. This benefit ensures that you are covered against loss or damage caused by an earthquake or tsunami.
Water and oil leaks. When water or oil escapes from gutters, pipes, baths, toilets, appliances or a range of other household items, you're covered for the resulting loss or damage.
Theft or burglary. Covers you against loss or damage caused by theft, attempted theft or burglary.
Malicious acts and vandalism. If your home or contents are damaged due to vandalism or a malicious act, your policy can offer financial protection.
Riots or civil commotion. Financial protection in the event that a riot, civil commotion, or industrial or political disturbance results in loss or damage to your home.
Accidental glass breakage. This covers accidental breakage of items such as window glass, skylights, fixed mirrors and light fittings, sinks, basins, baths, toilets and glass cooktops.
Explosion. Loss or damage caused by an explosion, as well as a landslide or subsidence that occurs as an immediate result of an explosion.
Impact damage. This benefit covers you against impact from objects such as falling trees, power poles, TV antennas, motor vehicles and meteorites.
When should I get house insurance?
So you've just bought your new home. Before you pop the champagne, make sure you're insured in case that cork decides to go straight through your wall.
It's a good idea to have building insurance in place when you exchange contracts. People used to get cover notes for the period between exchange and settlement, however, these are no longer offered. What you can do, however, is take out insurance and request a start date up to 40 days in the future.
If you require insurance in place in order to get a home loan, all you need to do is send a copy of your insurance contract to your lender in order for them to release the funds.
It's also a good idea to get your contents insurance organised before you move, as this will include damage or loss of your possessions while in transit.
Is home insurance worth it?
For most people, the answer to this question is a resounding "yes". Take a moment to think about how you would cope financially if your home and everything you own was completely destroyed. Sure, it’s a worst-case scenario and one that you’ll hopefully never have to deal with, but would you have the financial means to start again from scratch following an unexpected disaster? If you answered "no", then home insurance is something you must consider.
With the right level of protection in place, you can be sure that you won’t end up out of pocket if your home or contents are damaged or totally lost. Home insurance gives you peace of mind. There’s always a chance you will spend years paying premiums for a policy on which you never have to make a claim. However, knowing that it will offer crucial financial protection when you need it most, makes home insurance worth every cent.
How much cover do I need?
Unfortunately, there’s no "one size fits all" answer that explains exactly how much cover is enough for your home and contents. You need to carefully consider your insurance needs to work out what will be adequate protection. According to research from the Insurance Council of Australia, 83% of Australian homeowners and renters don’t have enough insurance to cover their home and contents. That’s an alarmingly high figure, so it’s essential that you take the time to think about your requirements before choosing a policy. Ask yourself:
- How much would it cost to completely rebuild my home?
- What about replacing my contents and all of my worldly possessions?
Unless you have sufficient protection to cover the cost of replacing everything following an unexpected disaster, you will be under-insured, and the financial consequences can be disastrous. Many insurers offer handy online calculators to help you work out how much home and contents insurance cover you need. These useful tools are a great place to start, but an independent valuation will be much more accurate.
You should also remember to consider the benefits of a particular policy: does it provide cover for all the risks you need protection against? Do you need to add extra-cost options so you have a suitable level of cover? If you take time to crunch the numbers and carefully examine your needs, you’ll be able to select the right amount of cover for your home and possessions.
What isn't covered?
As well as checking what a policy covers, it’s also essential to check the PDS for a list of general exclusions. These are situations in which an insurer will refuse to pay your claim. Common circumstances under which you will not be covered include the following:
- If you leave your home unoccupied for an extended period of time, such as 60 consecutive days.
- If you fail to properly secure your home.
- If you fail to keep your home in good condition.
- Pre-existing damage to your home or contents.
- Loss or damage caused by flooding. While some policies do include automatic flood cover, many insurers only offer this as an extra-cost option.
- While you’re renovating or extending your home you will not be covered.
- If your home is being used for an unlawful purpose.
- Damage deliberately caused by you, a family member or someone acting with your consent.
- Wear and tear, rust and gradual deterioration.
- Termite damage.
- Loss or damage that arises due to the presence of asbestos.
Our guide to common home insurance exclusions also outlines a range of situations when your insurer will not offer any cover. You should also read the PDS closely as well to ensure you don’t get any nasty surprises.
How much does home insurance cost?
The cost of insurance differs substantially depending on where you live, what kind of house you live in, your age, as well as a bunch of other factors.
Whilst there's no universally cheapest home insurance company, sometimes shopping around can give you the best bang for your buck.
We found a difference of $735 a year between the least and most expensive home insurance policy for the exact same home. You can easily find a cheaper policy by just shopping around.
|Budget Direct||$164||Get quote|
|Virgin Money||$173||Get quote|
How to reduce your insurance premiums
If you’re looking for the cheapest insurance cover for your home, the single most important thing you can do is compare a wide range of policies and shop around for the best deal. This will help you find the most affordable cover for your needs and choose a policy that matches your budget. However, remember that the cheapest home insurance isn’t necessarily the best policy.
Like so many other things in life, when buying home insurance you really do get what you pay for; if you choose a cheap policy with an insufficient level of cover, the results could be disastrous. Remember to look past the price of a policy to the features and benefits it offers to determine whether you are getting true value for money. There are also several other things you can do to lower the cost of your policy, such as the following:
- Choose a higher excess. Most insurers allow you to vary the excess payable when you make a claim; if you choose a higher excess, you’ll be rewarded with lower premiums.
- Choose a lower level of cover. Carefully calculate the sum you need to insure your home and contents for. Are you paying extra for a high level of cover that you don’t actually need? You may decide that it’s in your best interests to downgrade from a "platinum" policy to basic protection.
- Don’t add options you don’t need. Adding optional extras to your policy allows you to tailor home insurance protection to your requirements. Unfortunately, it also increases the premium, so make sure anything you add is absolutely essential.
- Don’t make any claims. Sometimes making a claim is unavoidable, but if your insurer offers a no-claim bonus, the cost of cover will be greatly reduced if you don’t submit any claims.
- Take advantage of discounts. Home insurers offer a variety of discounts to customers. These include discounts for loyalty, for seniors, for having multiple policies with the insurer, and for purchasing online.
- Review cover regularly. Just because a particular insurance policy was right for you a few years ago doesn’t necessarily mean it’s the best fit now. Cover needs change all the time; maybe you’ve just invested in a top-of-the-line home entertainment system and want to upgrade your contents cover. In addition, insurers are constantly updating their policies and premiums. Don’t be afraid to compare your options and see if you can find a better deal.
Got any other questions?
Get the latest home insurance news
*Disclaimer: The offers compared on this page are chosen from a range of products finder.com.au has access to track details from and is not representative of all the products available in the market. Products are displayed in no particular order or ranking. The use of terms 'Best', 'Top', 'Cheap' including variations, are not product ratings and are subject to our disclaimer. You should consider seeking independent financial advice and consider your personal financial circumstances when comparing products.
Ask an Expert