Home Insurance

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

• 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.

• 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.

• 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.

• Weigh up optional extras

  Insurers will advertise a variety of optional extras, but before you sign up, it's crucial to consider whether they are worth the added cost or if you're better off saving your money.

• 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.

• 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.

• 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:

1. Have a professional assess your home for a formal valuation
2. 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.