Home & Contents Insurance made easy
Confused about home and contents insurance? You're not alone! Between choosing what kind of cover you need - home insurance, contents insurance or both combined - reading the fine print in the PDS and working out how much your home and everything in it is worth, taking out a home and contents insurance policy is no easy task.
The good news is there are heaps of resources available to help you work it out. Here at Mozo, we’ve got a few great home insurance guides that will get you on the right track, plus you can read home insurance customer reviews to see how other Aussies feel about their policies. And below, we’ve put together all the important info you’ll need to know before you go signing the dotted line.
What is home insurance?
Home insurance, also known as building insurance or homeowners insurance, is designed to protect your home against events that are out of your control, such as fires, floods and storms. If an insured event causes damage to your house, home insurance will cover the cost of repairs.
How do I find home insurance that’s right for me?
To find the best home insurance for you, you’ll need to understand what cover you need for your particular situation, and compare your options carefully. Your home is likely the biggest financial commitment you’ll ever make, so finding the perfect insurance to protect it is vital - but not always easy.
Mozo can help. We’ve crunched the numbers and trawled through the fine print to breakdown home and contents insurance policies into easy to understand information, so you save time (and money!).
Step 1: Decide what kind of insurance you’re after
Are you a landlord looking to insure your building, or a tenant after a policy that just protects your furniture and valuables? Maybe you’re a homeowner that’s after a policy that will cover the whole lot - home and contents. Using our home and contents insurance comparison table, guides and tools, it's easy to work out what level of cover you need.
Step 2: Work out how much cover you need
Some things to consider are whether you need to insure your home and contents or just your contents. What about any valuable collections you might have, such as jewellery and paintings?
Step 3: Make your shortlist
Good news: you’re in the perfect place to compare your home insurance options! Our home insurance comparison table lists a bunch of policy options and their key features, to help give you an idea of how they stack up. Once you’ve narrowed down your search to a few home insurance providers you like, you can start collecting quotes.
Step 4: Start your application
Once you’ve settled on a home insurance policy that you like (and that offers a price you’re happy with), the application process can commence! Hit the blue ‘go to site’ button next to the policy of your choice to go to the provider’s website. From there, follow the prompts and provide the necessary information and you’ll be able to sign up in no time.
Why do I need home insurance?
Having the right insurance policy in place will help you keep your home and valuables safe in case anything is damaged or stolen. Water damage, fires and theft can affect anyone. And if they happen to you, would you rather it was paid for by an insurer or out of your pocket?
Home insurance is also there to protect against liability. Let’s say a neighbour trips in your front yard and winds up seriously injured. If you’re found to be responsible, your insurance policy will cover the resulting medical bills so you don’t have to.
You’re probably paying some form of insurance already, whether it’s for your car or for your health. So you might be wondering if another policy is really necessary? Well, you know how the ads go: the worst can happen at any time. And while you might be tired of hearing it, it’s true.
What kinds of home insurance are there?
Wondering which kind of insurance would best suit you? There’s a variety of home insurance policies out there which cater to different needs. Here’s a rundown of the main ones.
Building insurance: Building insurance is what you’ll need in order to cover the structure of your property. This includes permanent fixtures like roofs, walls, ceilings and floors, but can also extend to outdoor structures like garages and sheds.
Contents insurance: Though usually packaged with building insurance under the name ‘home and contents insurance,’ it is possible to buy contents insurance separately. This will cover personal possessions - like furniture, jewellery and computers - in case of damage or theft.
Home and contents insurance: This is the combination of building insurance and contents insurance, and covers the cost of damages to your home, plus the cost of replacing your belongings if they're stolen or damaged.
Landlord insurance: If you have a rental property and want to ensure it remains in top condition, it’s a good idea to take out landlord insurance. This will cover damage to the property, along with things like rent default and legal liabilities in case anyone is injured or dies on your property.
Renters insurance: Insurance isn’t just something that homeowners have to worry about — renters will also need some level of insurance. This is available to protect your personal belongings, rather than the building itself.
Features of home and contents insurance
Regardless of which insurance policy you choose, there are a few features that are common to all. Here are some terms you can expect to be acquainted with when you sign up.
Premium: The premium is how much you’ll pay for your insurance. Your insurance provider will assess how likely it is you’ll make a claim, weigh it up against how much you’re insured for and set your premium accordingly. Some of the factors they might take in account are where you live, how old your home is, what it’s made of, and if you’ve made any claims in the past.
Excess: The excess is how much you’ll pay towards each claim that you make. For example, if your excess is set at $500 and you make a claim on damages that cost $5,000 to repair, you’ll pay $500 while your insurance company will chip in $4,500. If you opt for a higher excess, your premium will go down. Similarly, if you only agree to pay a small amount in excess, your premium will be higher.
Limits of cover: This is the maximum amount that your insurer will pay on claims on certain items. For example, your collection of jewellery might only be insured up to $10,000. If $12,000 worth is stolen, you’ll only be able to claim up to $10,000.
Struggling with another unfamiliar home insurance term? Check out our home insurance jargon buster.
How do I choose the right level of home and contents insurance?
Too much and you'll be paying sky-high premiums, too little and you could be caught short and unable to afford to repair your home. So how do you work out the right level of home insurance for you?
One of the best ways to work out how much your home should be insured for is to talk to a professional property expert, architect or builder. Just remember that the cost of doing repairs or buying new materials changes over time, so you may need to revalue your home every so often to ensure you’ve still got the right cover.
When it comes to contents, go through all your valuables carefully and work out how much it would cost to replace or repair them. Keep in mind that most home insurance policies set a limit of cover for individual items, so if you have something that’s more valuable than that limit, you may need to take out additional cover for it.
And remember that valuables like jewellery and collectibles may not be covered by your standard contents insurance at all, so read the fine print and apply for special cover if you need it.
Written by: Kelly Emmerton, Mozo Money Writer.
Your home insurance FAQs, answered
Home insurance can be difficult to get your head around, so in case you’re still feeling a bit confused we’ve answered some frequently asked questions below.
What does home and contents insurance cover?
If you've got home and contents insurance, it will cover the cost of rebuilding, repairing or replacing your home and belongings if they're stolen or damaged. There are two different parts to your home and contents insurance policy, and each covers different things.
The building insurance or “home” component of home and contents insurance covers the structure of your house, including:
- The roof, ceiling, floors and walls
- Doors and windows
- Fitted kitchens - anything permanently built into the structure of the house
- Built-in cupboards and bathroom suites
Contents insurance covers the cost of repairing or replacing your possessions, including things like:
- Curtains and rugs
- White goods and appliances
- Computers and other electrical appliances, including your TV
- Clothing and jewellery
- Sporting equipment
On the flip side, watch out for common exclusions like flood cover - no matter how cheap the premium, you'll need to check the details before you sign up.
What’s the difference between home insurance and contents insurance?
Home and contents insurance is really a combination of two different policies - building insurance, also called home insurance, and contents insurance. These two are usually bundled together, but they’re also sold separately.
Home insurance, or building insurance, will cover expenses associated with loss or damage to the physical building that you own (for example rebuilding a collapsed roof). While contents insurance protects the things inside your home (such as furniture, white goods and other valuables.)
Not everyone needs both - for example, if you’re a renter, you won’t need home insurance, so you can opt for a contents insurance policy only.
Is my home fully protected against storms, flood and fire?
Having your home destroyed or damaged by natural disaster can be devastating, both emotionally and financially. Although wild weather might be out of your control, you can make sure you have the right insurance to help get you back on your feet.
There are two major things to keep in mind when it comes to cover for natural disasters:
- Exclusions on your policy. Most home insurance policies cover storms and fires, but if you live in an area prone to natural disasters, it’s worth double checking that it’s included and offers enough cover for you. If not, you may be able to add extra cover to your policy for an added premium.
- Underinsurance. The other factor that comes into insurance for natural disasters is making sure you’ve got the right level of cover. For example, if you’ve underestimated the damage a flood can do, or the cost of repairs afterwards, you may only be insured for a portion of the costs and will have to fork out the rest.
With Mozo you can quickly get across the fine print and protect your home with the right level of cover, for the best possible price.
What is underinsurance? Am I at risk?
Underinsurance is a big risk when it comes to home insurance in Australia. If you’re underinsured, it means you’ve underestimated the cost of repairing or replacing your home and contents and you’re insured for a lower amount.
If this is the case, your insurer can apply “averaging” to your claims. So, for example, if it would take $800,000 to rebuild your home, but you’ve only insured it for $680,000, then you’re only insured for 85% of your home’s value. So, your insurer might only pay 85% of any claim you make on that policy.
That can be a big blow right when you need it least, so make sure you’ve got an accurate idea of how much it will cost to replace your home and everything in it - and don’t skimp on your policy if it will backfire in an emergency!
How do I calculate how much home insurance I need?
This is one of the trickiest parts of taking out home insurance, and as we mentioned above, talking to a professional builder, architect or property expert can be handy in working out how much you should insure your home for.
Some insurers also have home insurance calculators designed to help you estimate the value of your home and possessions, but don’t simply take these calculations at face value - most work in broad strokes, and aren’t totally tailored to you.
The estimate from a home insurance calculator can give you a good point of reference, so you’re sure you’re in the right ballpark, but make sure you consult a professional or do a thorough review of your possessions yourself to make sure you’ve got the right cover.
How can I save money on my home and contents insurance premium?
While it’s important to have a home and contents policy that will offer you enough cover, there’s no point paying more than you have to for it! Here are a few handy tips to help you save money on your insurance premium.
- Use additional cover options. Optional additional cover is a great way to tailor your policy to your liking, and make sure you’re not paying for benefits you don’t really need. For example, a policy that automatically offers cover for big ticket items like cameras or work tools might cost more than one that offers them as extras. If you don’t own these things, then you can safely opt for the cheaper policy.
- Improve your home security. Adding a new security system to your home makes it more secure, which means you’re less likely to make a claim, which means lower premiums. You can also take measures to disaster proof your home, though an insurer might be less likely to lower your premium if you’re in an area where floods or fires are common.
- Ask for a discount. There are many different types of discounts on offer with home insurance, like a loyalty discount, bundling discount or seniors discount. But even if you don’t qualify for an advertised discount, try your hand at haggling on your insurance and ask your insurer if they can give you a better price.
- Claim with care. Every claim you make has the potential to affect your future premiums - the more you claim, the more likely you are to get a more expensive premium when it’s time to renew. Weigh up the excess against the amount you’re claiming and decide if it’s really worth it.
- Don’t automatically renew. It might be easy to just let your home and contents insurance auto-renew each year - but that won’t necessarily get you the best deal. Take the time to regularly review your policy and check that you’re still getting the most bang for your buck. And if not, switch policies.
Are there any traps to avoid?
Home insurance policies will have their share of caveats and conditions buried amid all those pages of information. Naturally, you’ll need to do your due diligence and read over the relevant PDS yourself, but here are just a few things you should keep in mind.
- If the damage caused can be chalked up to a lack of maintenance on your part - for example, if there’s water damage caused by leaks from old windows - you likely won’t have any luck making a claim.
- Similarly, if the damage caused can be traced back to a defect or fault which you were aware of - or should have been aware of - you’ll find you won’t be covered.
- Many policies won’t insure your property if it’s been unoccupied for an extended period of time. So if you’re planning on going away for a while, it’s a good idea to inform your insurance provider in case an arrangement can be made.
- You’ll need to watch out when it comes to removable items that you keep in your yard. Barbecues, outdoor furniture and sports equipment might not be covered under a regular policy.
- If you’re renovating your property and something goes wrong - you tear down the wrong wall, for example - it generally won’t be covered. You should also know that some policies draw the line at theft or injuries that occur while construction is going on at your home.