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There’s no legal requirement for Australians to hold Home and Contents Insurance. However, if you’re applying for a home loan, some lenders may require you to hold such cover before they fully approve your application.
We can answer this by breaking the cover down into its separate parts.
Home Insurance may help cover the costs of repairing or rebuilding your property1 if it’s damaged in a fire, storm or any other “insured event” – basically, anything outlined in the policy’s product disclosure statement.
This cover also extends towards the structure and permanent fixtures of your property, which may include:
By comparison, Contents Insurance concerns itself with the “contents” of your home2. It may help cover the costs of lost, stolen or damaged goods. Goods which may include:
Of course, this can vary from insurer to insurer. Some policies may put exclusions on certain goods; so, as with Home Insurance, you may wish to check the product disclosure statement to confirm what is and isn’t covered.
Home and Contents Insurance is a combined policy that gives you the benefits of both cover types.
In this way, it may help cover you for damage to your house as well as damage and or theft of your possessions.
Home Insurance basically comes in two types: total replacement cover and sum insured cover.
A sum insured policy requires you to estimate how much cover you need. Essentially, you select a sum for which you’re insured.
Although this is usually less expensive than total replacement cover, if you underestimate the cost of repairs or rebuilding your house then you could end up paying the difference out of pocket.
In contrast, total replacement cover may provide the necessary funds to restore your property to its former condition (prior to the insured event).
However, this usually involves an assessment from the insurer so that they can work out the funds required. As such, it can sometimes take a little longer to release the funds than it would under a sum insured policy.
“New for old” cover is a common type of Contents Insurance. Under this policy, if an insured item is lost, stolen or damaged, then the insurer may cover the costs of replacing it with a new one.
This means that you can replace the old insured item with a new equivalent item.
However, it is often more expensive than the other type of contents insurance: replacement value cover.
This is because replacement value cover only covers you for the current value of the insured item.
This wouldn’t be the original price of the item either, but a reduced amount. For example, a the TV that you’ve had for ten years would depreciate in value over time, and this depreciated value is what a replacement value policy would cover.
This will depend on the terms and conditions of the specific policy.
Most policies will outline certain exclusions. For instance, some policies might not cover damage incurred while your house undergoes renovation, and others might not cover the loss of jewellery or other valuables.
The product disclosure statement will also outline everything a policy does and doesn’t exclude. So it can be prudent to give this a read before committing to anything.
However, it should be noted that most policies will usually exclude the following:
Most of the time, a house’s replacement cost will be less than its market value.
This is because the market value is how much the house and land would sell for on the real estate market, while a replacement cost is how much it would cost to rebuild your house if it was completely destroyed. And typically it costs less to rebuild a house than it does to buy a new one.
Essentially, it means that you would have to pay for the rest of the expenses yourself.
This is why – before applying for cover – you might wish to assess how much it would cost to repair your home after an accident. Keeping this in mind when comparing your options can also help you select a suitable policy.
Again, this will depend on your insurer. However, many insurers may let you add optional extras to your policy during the application process, or at any time during the life of the policy.
These optional extras may also help broaden your coverage. For instance, such extras can include (but are not limited to):
Just be aware that such extras may come at an additional cost. Typically, you will also need to contact your insurer to add these extras, although some insurers may let you add them to your policy online.
As part of the application process, home insurers might ask for the following information:
This information will help them assess the risks involved in insuring your house and may also affect your premium as a result.
Your claims history will help your insurer work out how much risk they’re taking on by insuring you.
For instance, if your house is prone to accidents or natural disasters, this might reflect in your claims history. This history also provides a good indicator of how likely you are to submit a claim in the future.
Letting your insurer know about this is also part of your duty of disclosure. Basically, because you’re making an agreement with the insurer, you have a duty to be upfront with them so that the two of you can come to a fair deal.
Customers who don’t disclose the relevant information to their insurer can also have their claims denied. This is because the insurer wasn’t properly informed of all the risks they were taking on, violating the duty of disclosure.
This will depend on the terms and conditions of your specific policy.
Depending on your insurer, they may cover certain types of renovations and exclude others. So it’s always a good idea to check the product disclosure statement to confirm what they cover.
Additionally, you’ll want to contact your insurer before carrying out any renovation work. Most insurers make this a requirement in their policies, and by speaking to them you can also confirm whether or not they’ll cover the work being done.
Home insurance is cover that protects your home. This usually means the structure of your house – the floors, roof, walls and ceiling – as well as any attached fixtures or other buildings on your property.
Contents insurance covers the items inside your home. These would be your belongings: your television, your furniture and your clothing, for example. Household items that aren’t attached to your property.
One possible approach is to look at the policies offered by different lenders.
You might find that some insurers offer cover for certain events (such as flood damage) while others do not. Some insurers also cover certain items (such as lighting and jewellery) while others do not.
Comparing these different policies and weighing them against your own needs can also help you find one that might be suitable for you.
As part of this, you may also want to compare quotes between different insurers to find a policy that suits your budget.
We can also help you with this. At iSelect*, we provide an online tool that you can use to compare home and contents insurance from a range of lenders. So if you’re interested, feel free to give it a try online, or call our friendly team on 13 19 20.
When buying a house, you’ll also become responsible for any damage the house sustains.
This will generally occur sometime during the settlement period for your new home. This is the period when the property title is transferred to your name and can often take up to several weeks.
However, the exact point that you become responsible can still differ between each state and territory. Although the typical timeframes are as follows:
As a general rule, you may wish to set up home insurance before you assume responsibility for the property so you’re not without cover.
This being said, the date you assume responsibility can also depend on the terms of your contract with your real estate agent. So you might also wish to talk it over with a lawyer or solicitor to be sure.
Generally speaking, yes.
Your insurer may still cover your house, but they will usually stipulate how many days it can be left unoccupied. Beyond this limit, there would usually be a “gap” in your cover until your return.
For this reason, you’ll want to notify your insurer. They’ll inform you whether or not you’ll be covered, and whether you’ll need to purchase an extra premium or excess to cover your absence.
This will all depend on your specific needs and circumstances.
If you own a house but do not yet hold Home Insurance, taking out a policy could ensure you have some financial protection. However, the decision is ultimately up to you. That being said, it may be a requirement of your bank when purchasing a property. i
For instance, if you’re applying for a Home Loan then the lender may require you to hold a Home Insurance policy before the loan is approved. In such cases, you mayl want to ask the lender when exactly they need you to insure the house.
The moment you become responsible for your new house also differs between states and territories. So if you don’t want to be unprotected at any point, you may wish to keep these differences in mind:
Putting a Home Insurance policy in place from these dates can help cover you as soon as you become responsible for the new property.
However, the date you assume responsibility for the new house can also depend on the terms and conditions of the contract with your real estate agent. So it can be a good idea to check this with your solicitor or agent as well.
As the government website moneysmart notes, you may not need typical Home Insurance if you own an apartment or home unit that is under a “strata title” or “ Owners Corporation”.These agreements are fairly typical when buying an apartment or home unit as part of a larger complex The owner’s corporation will generally be responsible for taking out insurance on behalf of its owners for the building and common areas.
However, this responsibility does not extend to any of the possessions you keep inside the apartment or unit, such as fixtures, fittings, furniture or personal effects. To get cover for these possessions, you would usually need to consider under a Contents Insurance policy for owners of a strata title property.
If you haven’t taken out a Home Insurance policy yet, you might consider Home and Contents Insurance.
This is a type of cover offered by many insurers that bundles protection for your home and your belongings into one easy-to-track policy.
However, if you already have Home Insurance, you would need to check with your specific insurer about whether they can add Contents Insurance to the existing policy.
You also have the option of taking out a separate Contents Insurance policy if the combined Home and Contents Cover isn’t your preference.
Building Insurance, otherwise known as Home Insurance, is a type of insurance policy that covers your property. This may include:
So, if your property is damaged or destroyed by a flood, an earthquake or any other insured event, the insurer can help cover the costs of rebuilding.
Of course, you will need to check which events the insurer covers as part of this policy. And this can be found in the policy’s product disclosure statement.
Building Insurance can help provide a “safety net” for homeowners.
For instance, let’s say a freak storm or bushfire devastated someone’s home. If they don’t have Home Insurance, the cost of rebuilding could fall entirely on them. They might have to dip into their savings to repair the damage.
Building Insurance could help cover the costs of this worst case scenario. With Building Insurance, the homeowner might be able to make a claim and obtain the funds they need to rebuild.
In this way, Building Insurance can help provide peace-of-mind for homeowners.
This will greatly vary from insurer to insurer.
Some insurers will place exclusions on their policies. These could be exclusions for floods, earthquakes or other events. However, other insurers could make such cover a key feature of their policies.
It all depends on what’s contained in the specific policy’s product disclosure statement. Because of this, it may be helpful to compare different policies with each other – what events they cover and what events they exclude.
By doing so, you might be able to find a suitable policy for your needs.
Comparing Home Insurance policies may also prove particularly helpful here.
Because different insurers charge different premiums, and also provide different coverage options, comparing quotes could help you find a suitable policy.
Fortunately, we can help with this.
With iSelect*, you can compare policies from a range of providers using our easy online tool. If you’re interested feel free to get started today, and we’ll do everything we can to make the process quick and easy!
This can vary depending on the policy.
Some insurers may provide cover for phones and jewellery. But this is usually when such items get lost or damaged inside your home.
However, at an additional cost, you might be able to add Portable Contents Cover to your Contents Insurance. As this may cover you if certain valuables are lost or damaged outside your home.
It is also worth noting that certain valuables can also be subject to claim limits. For instance, some insurers may only be willing to insure jewellery for a maximum of $1000.
To find out what these limits might be, you may want to check out the policy’s product disclosure statement. As this document will give you an overview of the specific policy’s key features, including what is and isn’t covered1.
Again, this will depend on the terms and conditions of the specific policy.
Some insurers may provide cover for a smartphone that’s lost or damaged inside your home. But this would need to be outlined in their product disclosure statement.
Other insurers may allow you to add Portable Contents Cover (or “Personal Effects Cover2”) as an optional extra to your Contents Insurance, and this may provide cover for your smartphone when you take it outside the house. But you would also need to check the product disclosure statement for this extra, as such coverage is not always guaranteed.
Contents insurance can help cover the costs of your household belongings if they’re damaged or stolen3.
More specifically, it’s an arrangement where the insurer will replace, repair or provide a cash settlement for the lost or damaged belongings. That is, so long as this loss or damage is caused by an insured event – which may include fire, theft, vandalism and a range of other incidents.
Contents Insurance may help protect the things in your home you value.
You might have spent many hours working to afford such items – be it a handsome couch, flatscreen television, or the clothes inside your wardrobe; or maybe it was a thoughtful gift from someone special, such as a fancy bracelet or an air fryer you really like.
Losing these things to theft or bad luck can really hurt. But with Contents Insurance, you might not need to save up for those items all over again just to purchase a replacement.
In this way, Contents Insurance can provide some peace of mind, that even if life takes a nasty turn, you may have some way to soften the blow. Meaning that you can go on living with one less thing to worry about.
Although insurers can differ on the precise wording of their policies, most Contents Insurance products will provide cover for the same few events4.
These events may include:
Providers may also offer some optional extras for an additional premium such as:
You may need to speak directly to your chosen provide to understand what comes standard on your policy and what can be added as an optional extra. Ensure to read the product disclosure statment before making any purchasing decision.
Also, it’s worth noting that insurers can differ on the specific items their Contents Insurance covers. That being said, some of these items may include:
Again, it can be prudent to check a specific policy’s product disclosure statement to find out exactly which items and events are covered.
Essentially, an excess is the amount you’re required to pay when making a claim on your insurance policy1.
For example, let’s say someone takes out a Home Insurance policy for $200,000 with an excess of $1,000. Then, later on, when their house is damaged due to an insured event, they submit a claim on their policy which gets approved, the policy holder is required to pay the insurer $1,000 and the insurer will pay the balance up to the policy limit. If the claim amount is less than $1,000, the insurer will pay nothing.
In this way, we can think of an excess as the amount you agree to put towards a claim.
Most insurers have a minimum amount, as well as a maximum amount, you can choose for your excess.
However, this can vary greatly depending on the insurer.
Furthermore, some insurers will charge an additional excess for certain events, such as tsunamis or earthquakes.
To find out which other excesses may apply in addition to the policy excess, you should check the product disclosure statement (PDS) for the specific policy.
In the PDS the insurer will outline the key features, benefits and risks of their policy2. So it can be useful to look over if you ever have any concerns.
As a general rule, you’ll be required to pay your excess after your Home Insurance claim is approved. This will usually happen before your insurer organises any repairs or settlements.
This can depend on your insurer, so you’ll need to check with them.
Some insurers may allow you to change your excess at any time. However, this doesn’t typically include any additional excesses for certain events.
Also keep in mind that changing your excess could affect your policy in one of the following ways:
A suitable excess amount can depend on what you need out of an insurance policy, as well as your budget. So it may be worth giving this some thought.
Most insurers will require that you pay your excess in one lot – otherwise known as a “lump sum”.
This being said, some insurers may provide assistance if you are unable to pay this lump sum due to financial hardship. This could include giving you a longer timeframe to pay the excess or allowing you to pay it in instalments.
However, you will need to check with the insurer to confirm whether or not they’ll provide this option.
Put simply, Landlord Insurance is a type of insurance that covers a landlords investment property for certain events .
This can include events covered by regular Home Insurance, such as damage to a building caused by natural disasters.
However, it may also include cover for events specific to landlords, such as a tenant damaging their property, or the legal expenses that come from a tenant dispute.
Although each policy is different, they usually work along the following guidelines:
Landlord Insurance can help protect you against some of the risks that come with renting out a property.
See, whilst this issue may not be a common occurrence, there’s always a chance that you could have a tenant damage your property or steal the household items you’ve provided.
In such cases, you could be left with the repair costs. What’s more, you might not be able to find new tenants until all the repairs are finished, causing you to lose rental income.
But this is where Landlord Insurance could come in handy. It may help cover the costs of any repairs or damages and it might even cover you for any loss of income involved.
Landlord Insurance can help cover you for a variety of events. This may include things like:
That being said, the “insured events” of your cover vary from policy to policy. So it never hurts to check which events are covered and whether exclusions apply.
Fortunately, this can be found in the policy’s “product disclosure statement2” – a document that includes all the policy’s key features, terms and conditions.
Source: 2. https://moneysmart.gov.au/glossary/product-disclosure-statement-pds
No, Landlord Insurance is not a legal requirement within Australia.
It can, however, provide some much needed peace of mind. As it may help cover the costs of damage to your rental property as a result of theft, natural disasters or other insured events.
Home Insurance protects your personal property: the house, home unit or apartment in which you live.
It isn’t typically geared towards an investment property either. So while it can help cover the costs if your house is damaged by storms, fires, floods or other insured events, it doesn’t cover the specific risks that come with housing a tenant.
Landlord Insurance, by contrast, covers your investment property. That is, the property you use to generate a rental income.
As such, it can help cover you for many of the same events as a Home Insurance policy, but for events specific to leasing a house as well – such as a tenant damaging your property.
This will depend on the specific policy.
Some insurers may provide cover for the items you’ve provided for your tenants, which could include appliances, furniture, or other household belongings.
However, to work out exactly what’s covered in the policy, you’ll need to check the product disclosure statement, as this will tell you whether certain contents items are insured or not.
This will generally depend on your specific circumstances.
However, if you already hold Home and/or Contents Insurance for the property you’re selling, then you may wish to consider the following:
This being said, whether you choose to cancel your existing policy or transfer it to a new address is ultimately your choice.
There are many different reasons a premium could rise. Though these may vary from policy to policy, some common reasons include:
There may not only be one reason your premiums have increased, however talking to your insurer may clear up any question you have around your increase.
Generally speaking, no.
If your insurer has automatically increased the sum insured on your policy, you can contact them and request that this amount be lowered again.
Just keep in mind that these automatic increases are often processed to match the rising costs of goods and services – including what it might cost to carry out home repairs or replace your household belongings.
As such, it’s important to consider what sum insured amount you might need to cover your home at today’s prices.
Again, this will depend on your specific insurer.
For financial services an insurer is generally required to provide a minimum 14 day cooling off period when the policy is first purchased. Keep in mind there is no legislitive requirement for insurers to provide a cooling off period on the renewal of a policy. However they are required to send renewal document at least 14 days prior to the renewal of the policy. This “cooling-off period” or time to consider if the policy is still appropriate for you.
Some insurers will let you transfer an existing Home Insurance policy to a new address. However, you’ll need to contact that particular insurer – or check their website – to see if they provide this option.
From there, they can outline the next steps to get the policy transferred.
However, as part of this process, they might also need to assess the risk of insuring this new address – which can involve a change in your premiums.
You’ll usually be able to get your home insured as soon as you’ve obtained a certificate of occupancy for the building.
This might also be known as a “occupancy permit” or “occupation certificate” in some states.
Once you have this, you’ll be able to apply for a policy by calling an insurer of your choice or applying with them online. However, it may also be prudent to check with the insurer and find out if there are any other requirements too.
Put simply, flood cover is a type of insurance benefit that may help cover some of the costs if your home or your belongings are damaged by a flood.
Generally, it is offered as an optional extra for your Home and/or Contents Insurance for an additional premium.
Generally speaking, you’ll want to talk to your local council to determine your risk of flooding, and whether you live in a flood zone.
Some councils (such as the Brisbane City Council) will provide this information on their website. Alternatively, you can call your local council or speak to someone at their enquiries counter3 to get the information you need.
Source: 3. https://www.ses.nsw.gov.au/flood-resources/before-a-flood/know-your-risk/
The best way to find out if an insurance policy covers you for a flood is to check the policy’s product disclosure statement.
This document will outline all the key features of the policy4. That typically includes whether or not flood cover is an optional extra, and in which events the cover protects you. For instance, some policies may protect you from floods but not the landslides or mudslides that result from them.
If you already hold home or contents cover, you’ll also want to check your certificate of insurance. Typically, this will display any optional extras you have on your policy, as well as any exclusions or limits; and you can obtain a copy by contacting your insurer.
source: 4. https://moneysmart.gov.au/glossary/product-disclosure-statement-pds
Back in November 2011, the Australian government5 introduced a standard definition for floods:
“The covering of normally dry land by water that has escaped or been released from the normal confines of: any lake, or any river, creek or other natural watercourse, whether or not altered or modified; or any reservoir, canal, or dam.”
Home and contents insurers adhere to this definition as well. Their flood cover will protect you so long as it meets this definition, and so long as it meets the criteria set out in their policy’s product disclosure statement.
Source: 5. https://www.ga.gov.au/scientific-topics/community-safety/flood
This will generally depend on the terms and conditions of the specific policy.
However, the cover you receive also depends on the type of policy you hold. For instance:
This being said, there are some exceptions where flood cover may not provide protection. For some policies, this may exclude:
As always, you’ll want to check out a policy’s product disclosure statement to see what’s covered and what might be excluded. As this can differ from policy to policy.
In most cases, renters and tenants can get flood cover attached to their contents insurance policies – including “Renters Insurance”.
This may help cover the costs if their household belongings are damaged in a flood.
Just keep in mind that not all policies provide flood cover as an optional extra. So you may wish to read through the specific policy’s product disclosure, as it will tell you whether or not flood cover is available as optional extra (as well as which exclusions might apply).
Finally, it’s worth noting that renters and tenants won’t typically need building insurance. This is because they do not own the property – so any damage to the building becomes the landlord’s responsibility to insure.
Motor burnout cover – otherwise known as fusion cover1 – is a type of insurance for the electric motors in your household appliances.
Usually, it’s an optional extra for Home or Contents Insurance. These policies may provide cover for your home and your belongings if they’re damaged, but may not cover you if the electric motors in your appliances (such as your fridge or air conditioner) burn out.
In contrast, motor burnout cover may cover the costs of repairing or replacing these motors in the event of an electric current or power surge.
Ultimately, this decision will rest with you.
An optional extra, such as motor burnout cover, may increase the regular cost or “premium2” of your insurance policy. However, it may also ensure that you have cover for a wider range of events.
So, as with most financial products, there’s a trade-off involved: price vs risk. And the suitable choice may depend on what suits your budget as well as your insurance needs.
As a general rule, motor burnout insurance may cover the costs or repairs or replacement provided the below conditions are met:
This may also cover motor burnout in some appliances such as:
Certain insurers may also provide cover for the food that gets spoiled in a freezer or refrigerator as a result of a motor burnout.
This being said, policies can differ. And you may want to check that specific policy’s product disclosure statement3 to see which specific events and appliances are covered, as well as whether or not they’ll cover you for any spoiled food.
Again, insurers can differ. Some policies will cover you for certain events which other policies will exclude.
That being said, some common exclusions for motor burnout insurance are as follows:
As with checking which events and items are covered by a specific policy, you can refer to the policy’s product disclosure statement to find out which exclusions apply.
Portable Contents Cover – otherwise known as Personal Effects Cover1 – is a type of insurance that may provide cover for items that you take outside the house.
Specifically, it covers these items against accidental loss and damage.
It differs from ordinary Contents Insurance, which typically covers you for items and belongings so long as they’re kept inside your home. So Portable Contents Cover may be something to consider for items that are frequently take outside with you.
There are also two different categories of Portable Contents Cover:
Source: 1. https://moneysmart.gov.au/mobile-phone-tablet-and-laptop-insurance
This can differ depending on the insurer.
For instance, some insurers may offer a personal effects benifet that covers digital cameras and portable devices, while other insurers may not.
This is why it can be worthwhile to check a specific policy’s product disclosure statement before committing to it. This document will let you know the key features of the policy, including its benefits, exclusions, and the insured events it covers2.
This being said, some of the items insured by Personal effect Cover can include:
Some of the above items may only be eligible for unspecified Personal Effects Cover. So you’ll need to check the policy’s product disclosure statement to find out which items can be insured by the different cover types.
Generally speaking, no.
In some cases, insurers may offer this cover as an optional extra to your Contents Insurance.
This can usually increase your premium too, but as the government website moneysmart2 notes, it may be cheaper than holding Contents Insurance and Personal effect Cover as separate policies.
Renters Insurance may be a suitable policy for people who are renting a house, apartment, or home unit.
Basically, it’s a form of Contents Insurance. It helps cover certain items and belongings you bring into the property, replacing them, or covering the costs, if those items are lost or damaged due to an insured event3.
Such items may include, but are not limited to:
However, different insurers may cover different items in their policies. You’ll need to check out the product disclosure statement to find out which items are covered for that specific policy.
As always, this depends on the insurer, as well as the terms and conditions of the policy itself.
However, events which are typically covered include:
Again, keep in mind that the events covered may differ from policy to policy. Not all insurers will cover every event written above; and some insurers may only cover certain events at an additional cost.
Of course, you can also find which events are covered and which are excluded in the policy’s product disclosure statement.
What gets excluded by Contents Insurance can differ from policy to policy. However, as a general rule, the following events usually won’t be covered:
As is often the case, the specific exclusions will also be outlined in the insurance policy’s product disclosure statement. So you might wish to give it a read when researching policies.
As noted by the government’s Moneysmart1, there are a few things you may wish to consider before taking out Contents Insurance:
In addition to this, you may wish to compare different policies in order to find one that’s suitable for your needs and your financial situation.
Fortunately, we can help. At iSelect*, you can use our comparison service to compare Contents Insurance policies from a range of insurers, or call 13 19 20 to speak to our friendly team.source: 1.https://moneysmart.gov.au/home-insurance/contents-insurance
Basically, renter’s insurance could help provide some financial support in terms of helping cover the cost of repairing, or replacing, your household valuables should the unexpected happen.
It gives you a guarantee that if your valuables are lost or damaged by an insured event then you can always replace them, subject to the limits of your policy.
In this way, you’ll have one less thing to worry about. Essentially, it’s a policy to help you get through a difficult and stressful situation.