Written by Home and contents insurance is a combination of two different policies: home (or building) insurance and contents insurance. These two types of cover combine to offer you protection against damage to, or loss of, your home and insured belongings.
What types of home insurance are available?
Building insurance
Your home itself is your most valuable asset, so it’s important to have cover to match. Building insurance is designed to cover the structure of your home and its permanent fixtures and fittings against a range of insured events.
Contents insurance
Looking for protection against damage to or loss of your valuables? Whether it’s furniture like couches and beds, appliances, electronics or jewellery, contents insurance can offer the cover you’re after.
Landlord insurance
Of course, your needs are slightly different if you’re renting out an investment property. That’s where landlord insurance comes in handy. Not only does it cover structural and contents damage (if it’s furnished), but also damage caused by your tenants or their guests.
Flood insurance
Because some policies don’t cover extreme weather events, you might need to take out optional add-ons like flood insurance to increase your protection. This includes flood cover, which may be essential if your home is near a body of water prone to overflowing (except the ocean).
What events do home insurance policies cover?
Here are the events that are most commonly included in a home and contents insurance policy’s coverage:
- Fire
- Lightning
- Natural disasters (such as earthquakes, tsunamis and cyclones)
- Explosion
- Storm
- Theft, attempted theft, malicious damage or vandalism
- Impact (such as a tree falling onto your house)
- Riots or civil commotion
- Escape of liquid (such as a burst pipe)
All insurers will have their own definition for each of the above events, so it’s essential to know what can and can’t be covered.
It’s also crucial to be across the exclusions on your policy, which can include:
- Actions of the sea (such as damage caused by high tides or tidal waves)
- Wear and tear
- Acts of war
- Tree lopping
- Damage caused during renovations or defective construction/workmanship
- Damage stemming from existing damage
- Animal or pest damage
- Not adequately securing your home
- Leaving your home vacant for two to four months consecutively
What optional extras are available on home and contents insurance policies?
There are some events that you’ll have to pay a bit extra to have included in your policy’s coverage. These can include:
- Accidental damage
- Excess-free glass breakage
- Flood cover
- Motor burnout cover
- Portable effects cover (cover for damage to valuables outside your home)
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Do I need home insurance?
There are some situations where you’ll be required to take out a home insurance policy. For example, all home loan providers will require you to have an acceptable level of cover for the property when you buy a house.
However, when you’ll need to take out the policy exactly depends on where you live. Here’s a rundown of what the requirements are in each state and territory:
- ACT: required before or within one business day of the exchange of contracts
- NSW: required from the settlement date
- NT: required when entitled to or given possession of the property or the full purchase price is paid to the vendor (the earlier of the two)
- QLD: required from 5:00pm on the business day after the signing of the contract of sale
- SA: required before or within one business day of the exchange of contracts (or before the end of the cooling-off period)
- TAS: required before or within one business day of the exchange of contracts
- VIC: required from the settlement date
- WA: required when entitled to or given possession of the property or the full purchase price is paid to the vendor (the earlier of the two)
Aside from taking out a home loan, there’s no legal requirement to purchase a home insurance policy. However, not having any cover means you’ll be left to foot the bill if there’s minor or major damage to your home.
Do I need home insurance for an apartment or townhouse?
Not necessarily – if you purchase a strata-titled property, such as an apartment or unit, your home may already be covered by an insurance policy. This is because it’s likely to be built into your strata fees. You’ll need to confirm this with your vendor or body corporate manager (also known as strata manager) during the purchase process.
If you’re buying a Torrens-titled townhouse, however, your home insurance obligations will be the same as if you were buying a house. In this case, your lender would require you to take out a policy yourself.
What is accidental damage cover in home insurance?
As mentioned above, accidental damage cover is an inclusion or optional extra available on most home and contents insurance policies. It offers cover for regular household accidents that aren’t otherwise covered by your policy.
For example, if your child was kicking a ball around inside and smashed your TV, accidental damage insurance could help you cover the cost of repairs. Some other situations that you might be able to claim for are:
- Smashed tablets and laptops
- Red wine spills on valuable carpeting
- Breakages of expensive artwork
- Damage to your items or home structure while moving furniture
However, certain items will be excluded under this optional extra. These may include mobile phones, cash or gift cards, clothing, sporting equipment (while in use) and items used for your business.
Cheap home insurance: tips to reduce your premiums
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Compare your options online
Perhaps the simplest way to save is by comparing a range of quotes before you buy your policy. Doing this will give you more confidence that you’re getting the most bang for your buck or allow you to contact your provider and request a cheaper rate.
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Increase your excess
Choosing a higher excess means you’ll pay more when you make a claim, but less each month or year on premiums. If you can afford the increased excess, it could save you in the long run.
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Consider buying multiple policies with one provider
Many providers offer multi-policy discounts, such as when you buy home and contents alongside car insurance. Make sure all policies meet your needs before you buy them, though.
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Improve your home security
Having sophisticated alarm and home surveillance systems installed can act as a deterrent for potential break-ins. If you have these around your home, insurers will reward you with lower premiums.
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Don’t overestimate the rebuild and replacement costs
The simple reason that many end up paying overs for their home insurance is because the sum insured is too high. Providing accurate numbers for your home and valuables can make a difference.
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Avoid frequent claims
Making claims regularly for small things can count against you when your premiums are reassessed after 12 months. If the cost is near or less than your excess, it’s not always worth claiming that reason.
Why has my home insurance premium gone up so much?
If you’re wondering why your policy’s premiums have started to go through the roof, you aren’t alone. According to the Monthly Consumer Price Index Indicator from the Australian Bureau of Statistics (ABS) in February 2025, insurance prices are among the fastest-growing services in Australia.
In the 12 months leading up to February 2025, insurance costs went up by 7.6%. That actually represents a decrease in price growth compared to the 16.5% seen in the year prior to February, March and April 2024.
This is especially the case for home insurance, though. A report by Choice in February 2025 revealed that the average home insurance premium had increased by 16% over the previous 12 months. That equates to an extra $359 leaving the pocket of Australian policyholders.
There are plenty of factors that have impacted the cost of premiums over time. Inflation has proven to be significant in the years since the pandemic. This has led to things like the value of homes and cost of labour going up. These are both cited by those within the industry as major influences.
How to calculate the cost of rebuilding your home and replacing your contents
There are two main ways to work out the cost of rebuilding your home. These are:
- Have a professional assess your home for a formal valuation
- Use an online calculator to estimate the rebuild cost
Calculators are free and easy to use, but aren’t necessarily reflective of your circumstances. The quote you’ll receive from an architect or surveyor is likely to be more accurate, but you’ll have to pay a fee and take time out of your day to have it done.
Both of these options are also true for your contents, but you can also get an idea of their replacement cost by searching online. Compare it to similar items and those of similar age and condition to help you work out their value.
How to compare home and contents insurance policies​
Home insurance FAQs
You won’t need to take out a building insurance policy, as that’s the responsibility of your landlord. However, you can still look at contents insurance to cover your valuables, especially if all the furniture belongs to you. Some insurers offer specific policies for the unique needs of renters, so it’s worth looking into.
In most cases, termite damage won’t be covered by your policy. Termites fall under vermin damage, which is a common exclusion for these policies.
Sudden or accidental water leaks are covered as standard by home insurance policies. This can include things like burst pipes or leaks from appliances like toilets, dishwashers or washing machines.
However, damage caused by gradual leakage, such as due to a lack of maintenance, won’t be covered. This also includes byproducts of such leakage, such as rust and mould.
No – unless you’ve taken out a shared policy with your housemate or housemates, you’ll only be insured for damage to your property. Your housemates would need their own coverage to claim for damage to their contents.
Some insurers offer cover for injuries to your pets as an optional extra for contents insurance, but this isn’t a standard inclusion on home and contents insurance. This will usually only cover injuries caused by certain accidents (such as being hit by a car). Treatment as a result of your dog or cat eating something it shouldn’t have won’t usually be covered.
Yes – as a permanent fitting in your home, your air conditioner can be covered if it’s damaged by an included event. For things like motor burnout, though, you’ll need to look for an optional extra.
