GUIDES & RESOURCES

Home & Contents Insurance Queensland

In this article you’ll learn more about finding suitable level of home & contents insurance in Queensland.
home & contents queensland

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What is Home & Contents insurance?

Home and contents insurance covers your home and belongings against damage and loss from events that are out of your hands, such as bushfires and severe weather events1. These policies can be purchased both separately, or as a package. You can normally choose from two types of home insurance, and two types of contents insurance:

Home insurance:

  • Usually a “sum-insured” policy, whereby you set the amount that it would cost to rebuild your home, and in the event of a claim the insurer will either rebuild it up to this value, or in some cases offer this set amount in cash
  • Some companies offer “full replacement” policies (but again, they will often only cover you to what it would cost them to rebuild the home back to its original condition/style.)
  • It’s important to note that if you over-insure you home, that is, take out a sum insured greater than the actual rebuild value of your home, you will still only be compensated for how much it would cost to rebuild, and not for the extra amount that you were covered

Contents insurance:

  • Most insurers offer “new-for-old” replacement of your contents (which is usually capped at your ‘sum insured’)
  • This means it’s important to be covered for the full value of your contents, as you won’t be compensated for any lost or damaged contents which fall beyond the value threshold established with your policy
  • In the event of a claim you’ll only receive ‘new for old’ replacement of contents needing replacement, and not necessarily for the full amount you’re covered for in your policy

Policies can also have special conditions and various caps and exclusions. For this reason it pays to check the finer details before deciding which policy is suitable for you.

Risks to your Home & Contents in Queensland

Queensland is vulnerable to many types of natural disasters, including2:

  • Bushfires
  • Flooding
  • Storm surges
  • Cyclones

All of these events have the potential to cause substantial damage to your home and its contents, so it’s important to have the right insurance policy in place. The risks change depending on where you live in Queensland, and your insurance policy should accurately reflect the risks for your local area.

house insurance qld

Brisbane risks

Brisbane is built on a floodplain3, so it’s particularly prone to flooding. The 2011 Brisbane flood affected 22,000 homes and caused more than $440 million in damage4. You can use current flood awareness maps3 to figure out if your Brisbane home is at risk of flooding, and take steps to minimise the risk to your home and your finances.

North Queensland risks

One of the biggest threats to North Queensland homes is cyclones5. Flooding is also a risk, but only equates to about 20% of insurance claims resulting from covered events5. In contrast, cyclone damage makes up nearly 60% of home and contents insurance claims5, so it’s worth choosing a policy that covers you for these severe weather events.

Cost of Home & Contents insurance in Queensland

As mentioned, the cost of home and contents insurance in QLD differs depending on where you live. This is because each area is prone to different natural disasters. There has been an increase in extreme weather events in Australia in the last ten years, which has caused home and contents insurance premiums to steadily increase in all states and territories5.

Queensland has maintained some of the highest premiums in Australia, with rates in North Queensland being almost 60%5 higher than in Sydney and Melbourne.

How are premiums determined?

As with other types of insurance, home and contents is determined based on risk. Queensland insurers may use a combination of the following factors to determine your premium6:

  • How prone your area is to having floods, bushfires or other natural disasters
  • Level of excess
  • Chance of a claim
  • Potential cost of a claim
  • In-house operation costs and government charges

Your claim history, and the history of insured events in your area, are some ways that insurers may determine whether you’re likely to submit a claim6.

Cost of Home & Contents insurance in Brisbane

Premiums for policies that include flood cover in Brisbane vary greatly between locations5. This is because some Brisbane homes are more at risk of flooding than others.

Flood cover is sometimes completely excluded from home and contents insurance policies7. Others have special conditions or specific exclusions. If you live in a flood-prone area, make sure you check your policy carefully.

It may help to answer these key questions to avoid being underinsured after a flood:

  • Does your policy cover you for damage caused by flooding?
  • Are there any special conditions or exclusions that affect the level of flood cover?
  • How much does it cover you for exactly?
  • Is this enough to rebuild your home after a flood?

Average premiums in Brisbane are about 40% less5 than those in North Queensland, but still higher than those in Sydney and Melbourne.

Since the cost of flood cover can vary dramatically between policies, make sure you compare like policies for price and find a good deal for you.

Cost of Home & Contents Insurance in North Queensland

Cyclone risk differs from flooding. This is because cyclones cause regional rather than localised damage5. This means that everyone in an at-risk region will pay more on their premium to cover the risk.

North Queenslanders pay one of the highest premiums5 for home and contents insurance in Australia, largely because of the cost of cyclone risk. The only exception to this is north-west Western Australia, where cyclone risk and premiums are even higher.

As with flood cover, you should check that your policy covers you adequately for cyclone damage. The last thing you need after a damaging event is to discover that you’re underinsured.

Benefits of Home & Contents insurance

Home and contents insurance could save you a lot of money and stress in the event that you need to make a claim.

The damage caused by cyclones and floods in Queensland can be severe, and the cost of repairs high. Buying adequate insurance can ensure you’re able to rebuild your home without being left out of pocket. This can often mean the difference between losing everything, and being able to comfortably start over.

Find a Home & Contents policy which suits you

Click here to view iSelect’s range of home & contents providers, and select the one which suits you.

Sources:
1. https://www.moneysmart.gov.au/insurance/home-insurance/
2. https://getready.qld.gov.au/natural-disasters/
3.https://www.brisbane.qld.gov.au/sites/default/files/flooding_in_brisbane_guide_for_residents.pdf/
4.https://www.brisbane.qld.gov.au/sites/default/files/Brisbane_City_Council_12_month_flood_recovery_report_fact_sheet.pdf/
5. http://www.aga.gov.au/publications/home_contents_nth_qld/downloads/Home-Contents-North-QLD.pdf/
6. http://nqhomeinsurance.gov.au/background/
7. https://www.moneysmart.gov.au/insurance/home-insurance/storms-floods-and-fire/

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