- You’ve heard about smart phones, but what about smart homes?
- Understanding Home and Contents Insurance
- Your Guide to Renters Insurance
- A home owner’s guide to Home and Contents Insurance
- Home and Content FAQ
- Contents insurance explained
- Landlord insurance explained
- Claiming home and contents insurance
- Home & Contents Queensland
- Fire Insurance
- The Average Value Of Home Contents
- The Best Home & Contents Insurance
How To Find the Best Home And Contents Insurance
For homeowners, home and contents insurance can be the difference between security and losing everything. For renters, contents insurance can be a blessing in an unfortunate situation.
In this article you’ll learn what to look for in home and contents insurance, and how to make sure you’re protected against the potential risks in your area.
What to look for in a Home and Contents Policy
Many insurers package home insurance and contents insurance into a single insurance policy1. But you can also purchase them individually. By knowing what each offers, you can choose the right option for you.
The main type of home insurance policy sold through iSelect is a sum insured policy. This cover insures you for an amount that you chose when purchasing the policy. This amount should cover repairs, or a rebuild of your home after an insured event, as long as you’ve calculated the cost accurately.
It’s important to note that if you over-insure your home, you’ll still only be reimbursed for the amount it would cost to replace your original home. For example, if your home would cost $500,000 to rebuild, but you purchase home insurance cover to the value of $800,000 – your home will only be re-built to the value of $500,000.
Contents insurance is equally important for homeowners and tenants. It can cover you for the cost of accidental damage or loss of your personal possessions2. Some insurers cover any accidental event, while others are more specific about which types of events they cover.
Contents insurance covers insured possessions you keep at home, and provides limited cover for things you take outside the house. Make sure to review the fine print of your policy, as some can exclude items such as laptops, mobile phones, cash, and high value collectables.
New for old replacement covers you for a new item that replaces an old one that’s been damaged, or stolen2. When making this kind of claim, you may receive either a new version of the original possession, or an updated version. For example, if your television is stolen or damaged, you may receive either a new version of the same model, or a newer version – depending on your insurer, the nature of the claim, and the possession type.
Usually, your contents and new for old replacement policy will be up to a sum-insured amount. Meaning, you will determine the value of your contents and what you would like to have covered up to a certain value when purchasing your policy.
Collectables and jewellery
If you have a lot of expensive jewellery or collectable items, you should check whether your policy covers their full value2. Some insurers only offer limited cover but give you the option of paying extra to cover these types of items.
How much should you insure your home and contents for?
It’s vital that you choose the right level of cover for your home and contents. Otherwise, you could end up having to cover the cost of repairs, or replacing your possessions.
Insuring your home
Figuring out how much it would cost to rebuild your home isn’t easy. Here are some tips that may help you accurately calculate the cost of a rebuild3:
1. Calculate using elemental estimating rather than cost per square metre
Elemental estimating allows you to enter plenty of details about your home, which helps to give you a more accurate figure.
2. Opt for calculators that ask you a lot of questions about your unique home
Calculators that use a cost-per-square-metre method typically ask fewer questions, and either under or overestimate the costs. This is because they assign averages based on house size, rather than accounting for things like unique features, age, or quality of materials.
3. Use a few calculators to get a more accurate average
Calculators vary greatly, so it’s a good idea to use a few to see the differences. This should help you to gain a better understanding of the true costs of rebuilding your home.
4. Check regularly to make sure the figure is relevant to current prices
It’s important to check how much you’re insured for, and redo your calculations regularly. Otherwise, you may find yourself without sufficient cover when a rebuild costs more than you expected in today’s prices1.
Insuring your contents
It’s easy to underestimate how much stuff you actually have, as well as its real value. The following tips may help you come to a more accurate figure2:
- Go from room to room and write down everything of value
- Include less valuable items, like clothes, to ensure you’re covered for the real financial cost if you lose everything in a fire or similar event
Take photos of each room’s contents
- Use an online calculator to help work out an average total value
- Keep receipts of anything valuable
In the case of a burglary or fire, your computer may be stolen or destroyed, so it’s a good idea to keep your list of possessions in the cloud or somewhere other than in your home2.
The benefits of home and contents insurance in Australia
Australia is known for a variety of severe weather events and natural disasters. Depending on where you live, you may need cover for4:
- Bushfires and grassfires
When you’re looking for policies that cover specific events, keep in mind that cover can differ greatly between insurers. It’s essential to read the product disclosure statement to find out exactly what each policy includes.
Otherwise, you may think you’re covered when you’re actually not. One example of this is cover for bushfires5: some policies insure you for all damage, while others only insure you for damage caused by an actual flame.
By choosing the right home and contents insurance, you can reduce the financial risk of living in areas where these events occur. You can also gain peace of mind that your insured possessions are covered in a burglary or other event that’s out of your control.
How to compare home and contents insurance policies
Home and contents insurance policies differ depending on caps and limits, exclusions, and special conditions. At iSelect we can help you compare like for like on policies that are right for you.
Start comparing policies online, or give us a call on 13 19 20.
iSelect does not compare all providers or policies in the market. Not all policies are available at all times.
iSelect General Pty Limited ABN 90 131 798 126, AFS Licence Number: 334115. Any advice provided by iSelect is of a general nature and does not take into account your objectives, financial situation or needs. You need to consider the appropriateness of any information or general advice we give you, having regard to your personal situation, before acting on our advice or purchasing any product. You should consider iSelect’s Financial Services Guide which provides information about our services and your rights as a client of iSelect. We receive commission for each product sold.