Best Home Insurance

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, updated on March 6th, 2024       

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Because your home potentially represents the biggest investment you’ll make in your lifetime, it’s important that you provide it with the protection it requires. Insuring your home is one of the first major steps in the world of home owning, but it’s an easy aspect to get wrong. There are plenty of ways to ensure that the policy you buy to cover your property will be the best to suit your needs. You can find out about these and more in our comprehensive guide to the best home insurance, how it ticks and how it can help you.

How should I compare the best home insurance policies?

Fortunately, customers aren’t short on options for different home insurance policies and providers, while they also have a wealth of factors to take into consideration between each option.

The type of insurance you need

The first point to consider is what you’re looking for as a customer. It’s important to know the difference between building insurance, contents insurance and home and contents insurance. The answer is quite simple: building insurance policies cover types of damage to your home or property, contents insurance policies cover types of damage to your valuables or other belongings and the best home and contents insurance policies comprehensively include the two under one roof. Generally, home and contents insurance will be the most affordable and manageable when it comes to making premium payments.

The next significant thing to determine is what position you’re in as a homeowner. Most people looking to take out an insurance policy on their home will fit into the category of the standard owner-occupied property insurance. These insurance policies account for the fact that you’re always living in the insured property when it comes to calculating your premiums. 

However, if you’re an investor with tenants renting your property, you’ll probably look for the best landlord insurance to cover your property. This will cover you for more costs associated with renting out property, such as loss of rental income and damage caused by tenants. Also, since most of the belongings in your property will belong to your renter, there may be less of a need to take out contents coverage. However, there is landlord contents insurance available for furnished rental properties. In equal measure, renters can take out renters’ insurance to cover the loss of their belongings without paying for premiums that include damage to property that they don’t own.

The coverage you’re looking for on your policy

This is perhaps the most important factor to look for with your home insurance policy. There’s no use taking one out on your home if it doesn’t cover you in the areas you need it to. Take a look at the table below to see what sort of coverage you may receive for different types of home insurance policy.

Types of damage Building Contents Home and contents Landlord Renters’
Fire
✓
✓
✓
✓
✓
Extreme weather*
✓
✓
✓
✓
✓
Theft and/or burglary
✓
✓
✓
✓
✓
Vandalism
✓
✓
✓
✓
✓
Intentional third-party damage
✓
✓
✓
✓
✓
Riot or civil commotion
✓
✓
✓
✓
✓
Impact
✓
✓
✓
✓**
✓
Accidental damage***
✖
✖
✖
✖
✖
Escape of liquid
✓
✓
✓
✓
✓
Legal liability
✓
✓
✓
✓
✓
Animal****
✖
✖
✖
✖
✖
Alternative accommodation
✓
✓
✓
✓
✓
Loss of rent
N/A
N/A
N/A
N/A
N/A
Break of lease
N/A
N/A
N/A
N/A
N/A

*Extreme weather can include bushfire, flood, storm and earthquake damage. Insurers will differ on which combination of these will be included in their main home insurance policies.

**May not cover impact damage caused by a falling tree.

***Accidental damage can be available as an optional extra.

****Animal damage can come under accidental damage. Most insurers will only cover damage or loss caused by animals living at the address, rather than vermin, and won’t include damage caused by biting, chewing, clawing or bodily functions.

The key thing to note here is that not all insurers will cover the same types of damage. Each policy is different, so you’ll be able to compare and contrast the different policies in the areas that matter the most to you. In many cases, if aspects of coverage aren’t included in the main policy, you’ll be able to add them on as optional extras. A prime example of this is accidental damage, which is listed above. While most policies won’t cover accidental damage like glass or ceramic breakage, the vast majority will afford you the opportunity to add this to your policy at an added cost.

Another example is flood damage, which isn’t always included in with other types of extreme weather. The only drawback here is the additional cost, but if you’re at particular risk of damage in an area that’s only covered optionally, it’s worth the price hike. Overall, though, it’s definitely worth considering the optional extras offered by each insurer.

The cost of your insurance premiums

This is also a relevant consideration when it comes to tracking down the best home insurance policies, as you don’t want to bankrupt yourself in the pursuit of the best home insurance policy. While great coverage is indeed something you should aspire for in your home insurance policy, it isn’t the be-all and end-all. The most important thing for you and your finances is that your insurance payments are manageable and able to be completed regularly and promptly. A disparity in premium cost can make a significant difference to your finances in the long run, as the table below outlines.

Monthly insurance premium Monthly saving 12-month payment Annual saving 24-month payment Total saving

$100
N/A
$1,200

N/A
$2,400

N/A

$80
$20
$960

$240
$1,920

$480

$65
$35
$780

$420
$1,560

$840

$55
$45
$660

$540
$1,320

$1,080

$50
$50
$600

$600
$1,200

$1,200

*Estimates are not necessarily reflective of current home insurance premium rates.

Fortunately, cost is relatively easy to compare between insurers. You can find out how much your premium will be based on a variety of factors relating to yourself and the property you’re insuring through quotes on insurer websites. It’s important that you don’t just look for price when searching for the right home insurance policy; even if you can’t afford a huge outlay on insurance premiums, you should still favour policies which cover you in all the right areas.

Is sum insured cover or total replacement cover the best for home insurance?

This will largely depend on your own financial circumstances and the nature of your property. The key is to understand the difference between these two types of cover and what that’ll mean for you in the event you have to make a claim.

Sum insured cover is the most common of these two types of cover. Essentially, this works by you agreeing upon a set figure with your insurer at the outset of the insurance policy to cover the cost of repairing your home. This is the cheapest form of home insurance when it comes to premiums, as it generally covers you for a lesser amount of money. However, customers on a sum insured cover policy must bear in mind that there’s a greater risk of finding yourself underinsured in the event of a claim.

Total replacement cover, as the name suggests, covers the entire cost of repairing or replacing parts of your home damaged in an insured event to the condition it was prior to sustaining damage. This is the more comprehensive option for homeowners funds-wise, but obviously comes at a greater premium cost. As a result of dealing with more money, claims can often take longer to process due to insurers having to determine whether the damage sustained will result in a total loss or not. The most important benefit, though, is the greatly decreased likelihood of being caught out financially when making a claim.

Top tips for locking in the best home insurance premiums

Increase your excess

Increasing the excess on your home insurance will lower your premiums, as doing so reduces the amount your insurer will have to shell out when you make a claim.

Increase your home security

The level of security in your home will make a massive difference to your premiums, as your risk of break-ins and theft can be reduced significantly. If your risk is lowered, so too will your premiums be.

Decrease your payment frequency

Believe it or not, this actually does impact the amount you’ll pay in premiums. If you pay your premiums annually, you’ll incur fewer administrative fees than someone who pays their premiums monthly.

Ensure your home and contents are accurately valued

Be careful when calculating costs like these, as it’s easy to be conservative or round up to a greater figure than it’s worth. Overestimations can cost you quite a bit in premiums, so be mindful that anything you’re adding cover for will come out of your pocket monthly or annually.

Buy into as nice an area as you can

Even if your home is considered to be slightly less safe, buying into a nicer suburb or area can greatly reduce your premiums. You can always make improvements to your security if this is the case, which could aid your finances considerably in the long run.

Frequently asked questions about the best home insurance

Who are the best home insurance companies?

There’s no definitive answer to this question, which you may think would hinder your search for the perfect home insurance policy. However, this isn’t the case at all. The best home insurance company for you will be the one that suits your needs coverage-wise and charges a manageable premium rate. As a result, everyone will have a different answer when it comes to who the best home insurance company is. A great place to start is by collecting a series of quotes to compare and then go from there.

Will I be offered the best home insurance premium rates if I make less claims?

Probably, yes – many insurers will build in a no claims discount (NCD) that incentivises customers who haven’t made claims for extended periods in the form of a discount. This can slash the cost of your premiums by up to 70% in some cases. This isn’t necessarily designed to encourage customers to not make claims when they need them (getting coverage for major damage is probably worth losing your NCD), but to reward those who are “safer” and cost their insurer less money. Also, when it comes renewal, the base premium rate will be lowered by fewer claims in your insurance history.

Will I be offered the best home insurance premium rates the longer I stay with my insurer?

No – in reality, insurers will often hike up the price of premiums the longer you continue to purchase policies from them. This is because many people will simply stay with their insurer because it’s easier. It’s always best to shop around when your home insurance policy renewal is coming up to make sure you’re not missing out on great deals.

Can my contents be covered for their full value no matter how much they’re worth?

No – insurers will have price caps when it comes to the items that you’ll be able to cover. This figure may be implemented for each item or there may be an overall maximum coverage sum for all of your insured belongings. These will vary between insurers, so keep an eye on these price caps.

Can I be covered if my contents are damaged in the process of moving?

Yes – this is often called commercial storage cover and will fund the repairs or replacement of belongings damaged while held in a storage facility. This can include a lockable compartment in a warehouse to a moving truck. In most cases, commercial storage cover will be included as an optional extra on your contents or home and contents insurance policy.

Can I still receive the best home insurance policy if I live in a high-risk area for flooding or bushfires?

Probably not – insurers will assess the level of risk associated with your property when determining how much they’ll charge you for premiums. Essentially, the more risk posed to your house by external influences like weather or crime, the more likely it’ll be that your house sustains damage. As a result of this, because of your insurance company’s increased chances of covering damage, you’ll have to pay more in premiums. You can still find great policies to suit you even if you’re in position, but accessing basement market prices is unlikely.