So you want the best home insurance policy. Don't we all?!
While there's no holy grail home insurance policy that's right for everyone, there are a few ways you can make sure you're getting the best policy for your needs.
Stuck on who to choose? The 3 most popular home insurers on finder are:
How can I make sure I’m buying the best home insurance policy?
There’s a lot to consider when choosing home insurance and the whole process can start to seem a little daunting. To make things easier and help you find the best home insurance policy for your needs, remember the following tips:
Don’t skimp on the sum insured. Don’t try and save a couple of bucks on your premium by dropping your sum insured too low. Make sure the level of cover you choose would be sufficient to completely replace your home if it was completely destroyed. Also check that the policy automatically increases your sum insured each year so that it keeps pace with inflation.
Choose an affordable excess. Most insurers allow you to vary your excess when you apply for cover – the higher the excess you choose, the cheaper your premium. Just make sure you can afford to pay that excess if you need to make a claim.
Consider accidental damage cover. Most policies cover defined events cover only and provide accidental damage cover as an optional extra. But it’s an option that’s well worth considering – take a moment to think about all the costly accidents that’ve occurred at your home over the years when deciding whether it’s worth the extra expense.
Check cover limits. Make sure the policy provides sufficient cover for your valuable items by checking the PDS for cover limits and sub-limits. For example, if your $3,500 computer is destroyed by fire and your policy limits computer cover to a maximum of $1,000, you’ll end up significantly out of pocket.
Check the exclusions.Not only is it important to know what your policy covers, but also what it doesn’t cover. Read the list of general exclusions in the PDS so you’re fully aware of those situations and events when your insurer won’t pay claims.
Compare! The only way to find the best home insurance policy for you is to compare multiple policies. In the digital world this really is easy to do, so compare quotes, cover features, limits and exclusions to work out which policy stands head and shoulders above the competition.
Which is the best policy for me?
Here are three differentiating factors that are an easy way to determine how well your policy will actually cover your home. If your policy offers full building replacement, that's pretty much the highest level of cover you can get in a policy. If it doesn't offer this, look for a policy that offers a sum insured safety net - this can prevent you from being underinsured and can save you a bunch of money in the long run.
Quick tip: The best home insurance policy depends on what your needs are. If you want to make sure that you're covered completely in case your home is destroyed, look for a policy with full building replacement, or at least a sum insured safety net. If your priority is making sure red wine stains don't ruin your carpet, look for a policy with accidental damage protection.
Home insurance may be an essential purchase but it doesn’t have to be an expensive one. Keep the following tips in mind to help reduce your home insurance premiums:
Choose a lower level of cover. Many insurers provide multiple levels of home insurance cover, so instead of paying a high price for top-level cover if you don’t need it, consider whether a basic (and cheaper) policy might be sufficient for your needs.
Don’t pay for options you don’t need. Adding optional extras to your policy can increase your level of cover, but it also increases your premium. Make sure any extras you purchase provide essential cover.
Increase your excess. Most home insurers allow you to adjust your excess when you buy a policy. By choosing a higher excess to pay if you have to make a claim, you’ll receive a lower premium.
Buy online. It’s common practice for insurers to offer substantial discounts to customers who buy their policy online rather than over the phone or in store. It’s also quick, easy and convenient to compare policies and quotes online, so buying cover electronically has many benefits.
Secure your home. Alarm systems and other security measures can act as a major deterrent for burglars. As a result, overhauling your home’s security system can greatly reduce the cost of cover.
Don’t just renew. Instead of just blindly paying the premium renewal your home insurer sends out each year, spend some time comparing cover from other insurers. Not only could you save yourself some money, but you could also find a policy that better suits your needs.
At the very minimum, your home insurance policy should cover you for:
Theft
Fire
Vandalism
Damage from natural disasters such as storms, earthquakes, floods
Water or liquid damage from leaking pipes
Impact damage
Damage caused by animals
Legal liability cover
If you make a claim for loss or damage caused by any of the above events, building insurance can cover:
Repair and rebuilding costs for your home
Demolition and removal of debris
Professional fees as part of the rebuilding process, for example architects and surveyors
The cost of lodging council plans
Emergency accommodation while your home is unfit to live in
Emergency repairs
Mortgage discharge costs
Ensuring worker safety on the building site
Replacement of locks and keys following theft
If you make a claim on the contents cover portion of a home insurance policy, you’ll be covered for:
Repair or replacement of contents
Food spoilage
Taking contents to your new home
Credit card theft
Visitors’ belongings
Replacement of locks and keys following theft
Finally, all home insurance policies include liability cover. This benefit provides protection for your legal liability if a claim is made against you for an incident that causes:
Death or bodily injury to someone else; or
Damage to someone else’s property
What kind of exclusions are there?
Unfortunately, home insurance doesn’t cover every little thing that could potentially go wrong and cause damage to your home. Just like with any other type of insurance, it’s important to check the list of home insurance general exclusions before choosing a policy.
While what is and isn’t covered differs between insurers, your home insurance claim will generally not be paid if:
Your home is unoccupied for an extended period. Going away on holidays for a few months? Most home insurers won’t provide any cover if your home is left unoccupied for an extended period, usually 60 consecutive days or more. However, if you inform the insurer of your travel plans ahead of time it’s usually possible to keep cover in place.
You fail to properly secure your home. If your home isn’t secure, well-maintained and watertight, or if you fail to take reasonable steps to secure it after suffering loss or damage, your claim will be refused.
There’s existing damage. Home insurance will not provide cover for any damage that already existed to your house when you purchased a policy.
You’re renovating. If you’re conducting extensive renovations on your home, most home and contents insurance policies won’t provide any cover. Instead, you may need to invest in construction insurance to guarantee that your home stays protected.
You deliberately cause loss or damage. Home insurance covers against a broad range of unexpected events, not against intentional acts by you, your family members or someone acting with your consent.
You engage in criminal activity. Insurers will not pay any claims that arise because you were engaging in criminal or illegal activity. So if your secret meth lab burns the whole house down, rest assured that your home insurer won’t provide any cover.
Your building has structural faults. If your claim arises due defects in the design, structure, materials, workmanship or construction of your home, no cover is available.
Your claim is for wear and tear. If your claim is caused by wear and tear, gradual deterioration, rust, rot, mould or mildew, don’t expect any cover from your home insurance policy.
Your home is used for business. If you use your property to conduct any business, trade, profession, occupation or for any commercial purposes, no cover is provided. However, home offices are included in cover.
You rent your home to other people. If you’re taking part in a house swap or renting out a room or your entire property through an accommodation sharing website like Airbnb, you will not be covered for any loss or damage that results.
Check out the finder.com.au guide to common home insurance exclusions for more information, and read the PDS closely for full details of the situations and events your policy will not cover.
What additional cover options are there?
If you want to tailor home insurance cover to suit your needs, you can also purchase the following optional covers by paying an additional premium.
Sum insured safety net. This option provides extra financial protection if the sum insured you have selected for your home or contents is insufficient to rebuild your home or replace your contents.
Electrical motor burnout (fusion) cover. This optional extra covers you for loss or damage that results from the burnout of electric motors around the home. For example, it provides cover if the motor in your fridge or washing machine dies.
Accidental loss or damage cover. This allows you to cover your home and contents for accidental damage caused by unintentional mishaps, such as spillages and breakages that commonly occur around the home.
Increased cover for valuable items. In some cases, the maximum amount your contents insurer pays out for contents claims may not be enough to replace high-value items, such as jewellery, collections and works of art. By paying an additional premium, you can increase the level of cover for specified valuable items.
Portable valuables cover. This contents insurance option allows you to cover your portable valuables (smartphone, laptop, jewellery etc) against loss, theft and accidental damage when you take them with you away from home. You’re typically covered anywhere in Australia and New Zealand 24/7, and for a limited time period (usually 35 days per insurance period) anywhere else in the world.
Pet cover. By purchasing an optional pet pack, you can receive cover for veterinary fees when your dog or cat suffers an accidental injury. Some policies will also cover damage to your home caused by your pet, as well as boarding costs for your pet when your home is temporarily unfit for you to live in.
Understanding key home insurance terms
Term
What it means
Accidental breakage
This benefit covers the accidental breakage of glass and ceramics in your home. Some items, such as televisions, electronics, fine china and tiles, may be restricted or excluded from cover
Accidental damage
This benefit covers unintentional mishaps that cause loss or damage, for example red wine spills on carpet. It is usually only available as an optional extra
Defined events
Most home insurance policies only cover defined events, such as fire, storm, theft, vandalism, explosion and earthquake.
Excess
The amount you are required to pay for each incident if you make a claim
Insured event
Any event listed in and covered by your policy, for example fire, storm or theft
This type of home insurance policy pays the full cost of replacing your building
What should I look for when trying to find the best home insurance company?
Choosing cover is not just about finding the best home insurance, but also about finding the best home insurer. While it’s simply not possible to nominate one insurer as being “better” than all the rest, there are a few factors you should consider when comparing home insurance companies:
Customer service. Is your insurance provider easy to deal with? Do they have an online chat service? Can you contact them 24 hours a day, 7 days a week. Making a home insurance claim can be a very stressful time, so being able to deal with an insurer that’s easy to contact at all times is crucial.
Claims process. How easy is it to lodge a claim with the insurer? Is there a 24/7 claims service available? Can you submit a claims form and supporting documentation online? If you need to make a claim you want the entire process to be as smooth and hassle-free as possible, so investigate how you can claim and how long the insurer takes to process claims.
The underwriter. It’s also essential to consider the underwriter that actually issues the home insurance policy. Is it a respected company with ample experience and a strong financial position? Does it have a good reputation for paying out claims?
Policies offered. Does the insurer offer home insurance that offers the benefits and features you need? Can you tailor cover to your requirements by adding or removing optional extras?
Reviews and recommendations.Check out online reviews to find out what sort of experiences other homeowners have had with the same insurer. Ask friends and family members who they insure with and whether they would recommend their insurer.
Switching insurers – can you find a better deal?
Many people take a ‘set and forget’ approach to home insurance. Sure, they might do a thorough comparison the first time they buy cover, but once they’ve chosen an insurer they tend to simply pay their policy renewals each and every year without searching for a better deal.
But this can be a costly mistake for two reasons:
You could be paying too much for cover. Don’t assume that just because you’re a long-term customer your insurer will offer you the best possible price. You may be able to access an equivalent level of cover from another insurer but at a much lower price.
There could be a better policy out there. Your home insurance policy might have met your needs 5 or 10 years ago when you last compared cover, but there’s every chance your cover needs will have changed since then. There may also be different policies and cover feature available in today’s insurance market, so shopping around could help you find cover that’s better tailored to your requirements.
So when your next home insurance renewal appears in your letterbox or email inbox, don’t just pay the premium quoted to you straight away. Take some time to compare quotes from a few other insurers to see if there’s a better deal out there. Switching home insurers is quick and easy, and it can make a surprisingly big difference to your bank balance as well.
Who are the best home insurance companies in Australia?
Want to find the best home insurance for you? One of these home insurance companies or brands might have the answer you're looking for. Here are some options or view more here.
You are underinsured if rebuilding your home costs more than the value it is insured for. If disaster strikes your home and you’re underinsured your insurance payment will not cover the costs of rebuilding your home. You can avoid underinsurance by:
Using a home insurance calculator to determine your total sum insured
Reading your PDS thoroughly
Knowing your potential rebuilding costs by hiring a valuer or quantity surveyor
Being aware of additional costs, such as demolition fees and debris removal
That’s entirely up to you. Accidental damage is an optional extra on many home insurance policies. It can provide peace of mind and protect your home from minor accidents like red wine on carpet or smashed windows. While it can offer important protection for some homeowners, keep in mind that it will increase the cost of cover. The extent of coverage also varies between providers and policies, so read the fine print carefully.
Your home is covered while you’re away on holidays. However, if your home is unoccupied for more than a certain number of consecutive days (60 is a common limit) special conditions may apply to your cover and you may need to notify your insurer of your travel plans.
Every home insurance policy should come with a key facts sheet. This is a simple document that outlines exactly what you are covered for and other policy specifics you need to know. It is written in clear, non-technical language. Always read through the key facts sheet (and the PDS) before buying a home insurance policy.
*The products compared on this page are chosen from a range of offers available to us and are not representative of all the products available in the market. There is no perfect order or perfect ranking system for the products we list on our Site, so we provide you with the functionality to self-select, re-order and compare products. The initial display order is influenced by a range of factors including conversion rates, product costs and commercial arrangements, so please don't interpret the listing order as an endorsement or recommendation from us. We're happy to provide you with the tools you need to make better decisions, but we'd like you to make your own decisions and compare and assess products based on your own preferences, circumstances and needs.
Richard Laycock is Finder's insurance editor, and has spent the last five years wrangling insurance product disclosure statements. His musings about insurance have appeared on Money Mag, Yahoo Finance, and Travel Weekly. When he’s not helping people make sense of insurance fine print, he is testing the quality of cocktails in his newfound home of New York. Richard studied Media at Macquarie University and The Missouri School of Journalism and has a Tier 1 Certification in General Advice for Life Insurance.
Only the cost of the property’s structure and its associated systems, fixtures, and finishes will be included in the estimate. The land value is included in a home’s market value but it’s not be included in the amount of insurance you buy.
Please make sure to read the eligibility criteria, features and details of the policy, as well as the relevant Product Disclosure Statement PDS/T&C’s of the policy before making a decision and consider whether the product is right for you. If necessary, speak to the insurance brand to verify any details.
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Does the cost of land included in home value to be insured?
Hi Mahendra,
Thank you for your comment.
Only the cost of the property’s structure and its associated systems, fixtures, and finishes will be included in the estimate. The land value is included in a home’s market value but it’s not be included in the amount of insurance you buy.
Please make sure to read the eligibility criteria, features and details of the policy, as well as the relevant Product Disclosure Statement PDS/T&C’s of the policy before making a decision and consider whether the product is right for you. If necessary, speak to the insurance brand to verify any details.
Regards,
Jhezelyn