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Protecting Your Investment: Home and Contents Insurance

Once you own a home, insurance is non-negotiable. Your lender will require it, and you should have it regardless. Understanding the difference between home insurance and contents insurance is critical.

Home insurance (also called building insurance) covers the structure of the property—walls, roof, foundation, fixtures, and permanent installations. It covers damage from fire, theft, weather, and other perils.

Contents insurance covers your personal belongings—furniture, appliances (that aren’t permanent), electronics, and other moveable items. It’s separate from home insurance and optional legally (but essential in practice).

Why both matter:

Scenario: a fire damages your home and destroys your furniture.

With home insurance only: your home is rebuilt, but you have no furniture, appliances, or personal items. You’re starting from scratch.

With both: home is rebuilt, and you’re compensated for your belongings.

Home insurance details:

Your lender requires you to have home insurance as a condition of the mortgage. You’ll provide proof of current insurance.

Coverage includes: buildings, permanent fixtures (kitchen, bathrooms), swimming pools, permanent structures (sheds, garages).

Exclusions typically include: garden/landscaping (some policies do cover this), wear and tear, and consequential loss (e.g., loss of rent if you can’t lease the property).

Cost: typically AUD 300–AUD 1,000+ per year, depending on property value, location, and risk profile.

What to check:

  • Replacement value (the cost to rebuild): make sure it matches your home’s actual rebuild cost
  • Excess (your deductible): typically AUD 250–AUD 500 per claim
  • Inclusions: some policies cover accidental damage or malicious acts; others don’t
  • Discrepancies: some insurer won’t cover homes you’ve owned less than 5 years (watch for this)

Contents insurance details:

Not legally required, but strongly recommended.

Coverage includes: furniture, appliances, electronics, clothing, books, and personal items.

Exclusions: valuables (jewelry, art) usually need separate coverage; cash; vehicles.

Cost: typically AUD 150–AUD 400+ per year, depending on contents value and excess.

What to check:

  • Agreed value vs. sum insured: agreed value is better (you and the insurer agree on value upfront)
  • Off-premises coverage: some policies cover items temporarily away from home
  • High-value items: jewelry, art, or electronics might need separate coverage or riders
  • Standard excess: typically AUD 100–AUD 300

Combined approach:

Get quotes from 3–4 insurers for both home and contents.

Bundle both with the same insurer (often cheaper than separate).

Check comparison sites, but also ask insurers directly—sometimes they offer better rates to repeat customers.

Review annually (insurance companies raise rates; shopping around can save you AUD 100–AUD 300/year).

A practical example:

Home insured for AUD 600,000 rebuild value. Contents insured for AUD 80,000. Combined annual premium: AUD 1,200 (AUD 800 home + AUD 400 contents).

That’s about AUD 100/month for comprehensive protection.

If a major fire destroys the home, both insurers are triggered:

  • Home insurance rebuilds your house
  • Contents insurance replaces your belongings

You’re covered.

One final tip: when you buy, don’t wait until settlement to arrange insurance. Get quotes early and have a policy in place from settlement day. Some lenders require it; at minimum, you shouldn’t own property uninsured for even one day.

Insurance is a cost of homeownership, but it’s a cost that protects your biggest asset and your peace of mind.