Home & contents insurance
Choosing the right insurance for your home and possessions is
really important. Here we explain the different types of home and
contents insurance you can get and how to decide between different
Home insurance covers the cost of loss or damage to the building
you own and contents insurance covers the cost of loss or damage to
your possessions. They are often bundled together as a 'home and
contents insurance' package but they are actually separate policies
so you'll need to work out what cover you need for each.
Choosing a home insurance
Home insurance covers the cost of rebuilding or repairing your
home and helps protect you against things that are out of your
control, such as damage from natural disasters like storms and
Total replacement vs sum-insured cover
There are two types of home building insurance. First you need
to decide which one suits you best:
- Total replacement cover - includes all the
costs to rebuild your home to the standard it was prior to an
event, so you don't need to worry about any shortfalls between what
it costs to repair or rebuild your home and the amount you are
insured for. Total Replacement policies reduce the risk of
underinsurance, but only a few insurers offer these policies.
- Sum-insured cover - is more common and
will cover you up to a set amount to repair or rebuild your home.
This set amount is referred to as 'the sum insured'.
All home insurance policies have exclusions, caps and limits and
these vary between insurers so it is important to ask questions and
read the product disclosure documents when comparing different
Is your home in a risky area?
Some homes are located in areas of increased natural risks, such
as bushfire, flood or cyclone. If you live in an area of increased
risk it is important that your home insurance covers these events
and that you have enough insurance (sum insured) to rebuild or have
a total replacement policy.
Most policies cover fire but not all cover for flood and
For bushfire risk, you may want to understand your home's
Bushfire Attack Level (BAL). If your home is destroyed, you may
need to rebuild it to comply with new building codes which can
increase the cost of rebuilding. Our storms, floods and fire
webpage explains how to find out if you live in a disaster prone
Check what the policy does and doesn't cover
Home insurance policies differ between insurers and even between
home insurance 'brands' offered by the same insurer. To decide on
the best insurance for your home, find out what you are covered for
with each policy and what you are not covered for (exclusions)
including any caps or limits.
You can find this out on the key factsheet for the home
insurance product which will be on the insurer's website, or you
can ask them to send you a copy. The factsheet summarises key
information about the policy including what you are and aren't
If you want more detail than what's in the key factsheet, you
should read the Product Disclosure Statement which you can also get
from the insurer.
Check the policy pays out enough to fix your home
Also check you will have enough insurance money paid out to you
to rebuild your home at today's prices. To know if the payout
amount is enough, you'll need to work out how much it will cost to
rebuild your home. Find out more about estimating rebuilding
It is more important to check this for sum insured policies than
total replacement policies as you should be fully covered for a
rebuild with a total replacement policy. Some policies offer
'extended cover', but this may be subject to certain conditions and
you'll need to check what those are.
How many insurance quotes should you get?
Use at least three calculators to compare sum-insured policies
because the results can differ.
Always shop around for the right level of cover at the best
price. It's as simple as phoning a few insurance companies, at
least 3, or visiting a few websites.
Don't just compare price
When shopping around, it is important to not just compare the
prices of policies. You should also compare what is covered and
what is excluded and check if the policy offers any additional
benefits. For example, some sum-insured policies offer 'extended
cover' that provides up to a certain amount, e.g. 30% on top of the
sum insured, in the event of a total loss. This is a good way to
help reduce the risk of underinsurance.
If you live in North Queensland, the North Queensland home
insurance website can help you compare policies.
contents insurance policy
Contents insurance covers the cost of replacing or repairing
your household items and possessions. This includes furniture,
clothes, appliances and jewellery.
Keep receipts of household goods for proof of ownership.
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.
You may want to set up an online inventory for these details
which can be stored away from your home.
Check what the policy covers
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 belongings
- policies that replace your belongings with new items e.g. 'new
'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 can pay the first
$1,000 of any loss, the insurance premium will be cheaper.
Case study: Alina and Daniel are burgled
Alina and Daniel moved into a small apartment near
the city. They decided to get contents insurance even though their
building had a security system.
Two months later their apartment was burgled. They lost their
laptop and some DVDs. Alina was very upset but glad they took the
time to get the right cover. Her laptop was replaced and she was
compensated for the stolen DVDs.
Insurance for special collections or jewellery
Most home contents polices ask you to declare 'collections'
separately. A collection can be DVDs, stamps or anything else - ask
your insurer what can be identified.
If you don't declare your collections, you may not be able to
claim the full amount of your loss if your collections are stolen
Most insurers provide limited cover for valuables such as
jewellery. You may need extra cover to adequately insure these type
Be honest with your
Many insurers won't cover events which occur if your home is
unoccupied for more than 60 days. Check your policy.
You must 'tell it like it is':
- when you buy or renew a policy
- if you make a claim
- if your circumstances change
You should also ensure your home is properly maintained. For
example, some insurers insist you have deadlocks on your doors and
windows. You could also install an alarm. Failing to meet the
requirements of your insurance policy may mean any claim you make
Don't be tempted to add fictitious items to your list of lost or
damaged goods. If you get caught, there could be serious legal
Making a claim
When you want to make an insurance claim, tell your insurer of
any damage or loss immediately. This can often be done by phone.
Sometimes you will be asked to complete a claim form.
Tell the truth and include as many details as possible of the
incident. Keep and provide all documents supporting your claim.
Make sure you cooperate with your insurer and the people they
employ to help assess the claim, such as investigators.
Paying out contents
Some insurers offer alternative ways to settle insurance content
- replace the goods
- give you a cash settlement
- give you a gift card.
If you receive a gift card, remember you'll need to use it
before its expiry date and it may only be used in a particular
chain of stores.
If you have any issues with your gift card or need to arrange an
alternative settlement option, contact your insurer.
Find out how to
solve other issues with gift cards.
Choosing the right home and contents insurance
can give you peace of mind. By researching your options thoroughly,
you can protect your most precious asset - your home.
Last updated: 12 Oct 2016