Home Insurance for First-Time Buyers

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What are the different types of home insurance?

Do I have to get home insurance if I own a property?

How much coverage do I need?

How do I calculate the value of my contents?

How much does home insurance cost?

When do I need to start coverage?

What’s an insured event?

How do I make a home insurance claim?

What should I know about buying home insurance for the first time?

Compare home insurance today

Long story short

Being underinsured can leave you financially exposed

Regularly reviewing your coverage can help avoid being caught short.

Based on iSelect data, home insurance costs between $1,000 and $2,000 annually

Property location, security features, and claims history can impact premiums.

It’s worth starting your coverage early – like before moving in

You become responsible for damage and loss even before moving into your new property.

What are the different types of home insurance?

For first-time property owners, home insurance can protect what’s likely one of the biggest investments in life. And for something you’ve worked so hard for, the right type of home insurance can spell the difference between ‘home sweet home’ and a financial headache. 

People may think of home insurance as one simple product, but it’s often used as an umbrella term for a range of policies. It can include building insurance, which covers your property’s structure, contents insurance, which covers the stuff inside, or a mix of both. It has your back if your home or stuff gets damaged or nicked due to things like fire, theft, or natural disasters.

Combined home and contents insurance

This type of home insurance bundles building and contents insurance into one policy. It’s great for protecting not just your home’s structure but also the stuff inside – from your KitchenAid to your Tempur mattress. For first-time home buyers, this is a clever way to cover almost everything in your home and feel confident you’ve got all your bases covered. After all, when you’re juggling so much already, one less thing to worry about goes a long way! 

Building insurance

If the unexpected happens, building insurance can cover the cost of fixing or replacing your house. This type of home insurance is there to protect your property’s structure from things like storms, fire, and even theft. And by ‘structure’, we’re talking walls, roof, outbuildings (sheds and granny flats), and fixtures – basically, anything that wouldn’t tumble out if you tipped your house upside down! It’s sometimes referred to as ‘home building insurance’.

Contents insurance

Do you own things you’d hate to lose or replace out of pocket? Contents insurance focuses on protecting what’s inside your home. Whether it’s your furniture, electronics, or even your favourite sneakers, contents insurance can step in if these items are damaged, lost, or stolen. You can even add extras to your contents insurance, like portable cover for the stuff you often take with you outside the house. 

Strata insurance

If you’re buying a property within a strata title – like an apartment, a unit, or a townhouse – then you’ll typically need to contribute to the cost of strata insurance. This is often paid for by the homeowners in your complex and organised by the body corporate (or owners corporation). It covers the building’s overall structure and its shared spaces. However, it won’t always insure the contents inside your home (you might need to address this with separate cover).   

Do I have to get home insurance if I own a property?

The answer depends on the type of property you’re planning to buy. 

Standalone house

If you have a standalone house, getting combined home and contents insurance could be a smart move.  

Building insurance isn’t really a legal must-have in Australia, but most banks and lenders won’t approve your mortgage unless you can show proof of it. Plus, depending on where you live, your property might face some risks. Bushfires, flood, theft, or even a burst pipe can cost you your holiday fund if you’re not covered.  

And if you want your precious things covered, it’s worth looking into contents insurance, too. 

Property in a shared complex

If you’re looking to buy a strata property – like an apartment, townhouse, or unit – there’s a good chance the owners’ corporation (or body corporate) has already arranged and paid for strata insurance. You’ll usually contribute to this insurance through strata levies (or body corporate fees), which also go toward repairs and upkeep of shared spaces. 

On top of strata insurance, you might want to consider getting contents insurance to protect your personal belongings. And it’s a good idea to review the details of your strata policy or discuss it with someone from your owners’ corporation to make sure there aren’t any gaps in your coverage.

How much coverage do I need?

For some things, it’s fine to do a bit of guesswork, like tipping at the pub or taking a punt on tomorrow’s weather. But guessing how much insurance you need? That might put you at risk of underinsurance.  

Being underinsured might not sound like a big deal, but it can really leave you in a tough spot if disaster strikes. Underinsurance means you’re not covered for the full cost of repairs, rebuilding, or replacing your belongings. It’s like having an umbrella that’s too small to keep you dry in a storm. 

The financial impact of underinsurance can be overwhelming, especially when you’re already dealing with the stress of something going wrong. That’s why it’s so important to get your numbers right. 

Helpful tip

Underinsurance often happens because people underestimate the value of their property or possessions.  

Building costs can change over time, especially with rising materials and labour prices. It can also be easy to overlook things like demolition fees or replacing outdoor structures.  

For contents insurance, many of us don’t realise how quickly things add up – from your wardrobe to your appliances. If the unfortunate happens and you have to replace them all at once, it can cost a lot – and I mean, tens of thousands! 

To avoid being caught between a rock and a hard place, make sure to regularly review and update your insurance coverage to reflect the true value of your home and belongings (if you have combined home and contents insurance). 

Adrian Bennett

General Manager for General Insurance

How do I calculate the value of my contents?

Start by making an inventory of your belongings. You can break it down room by room and assign an approximate replacement cost to each item.  

Remember to assess not just big-ticket items (like laptops and jewellery) but also everyday essentials such as furniture, appliances, books, and clothing. Being thorough ensures you’re realistically covered if you need to make a claim. 

If the thought of walking around the house and making a list of all your stuff sounds like those jobs that’ll sit on your to-do list for a year, you can try using an online calculator. It works out the value of your contents based on things like your property type and how many rooms you’ve got.  

How much does home insurance cost?

On average, a combined home and contents policy in Australia might set you back anywhere from $1,000 to $2,000 a year.¹Premium data from iSelect customers between 1 July 2023 and 30 June 2024 It’s always a good idea to shop around for quotes so you’re not paying more than you need to for the coverage you want. 

Home insurance premiums vary widely depending on factors such as:  

• the type of coverage you choose (home and contents insurance tends to cost more than building-only insurance)
• your property’s location (high-crime or high-risk flood and bushfire areas could mean higher premiums)
• the age and materials of your home (newer properties could mean you’ll be paying lower premiums)
• any security features at your home (insurers love a secure home)
• your claims history (you might pay a higher premium if you’ve made any claims recently)
• any optional extras, like accidental damage cover
• the value of your property and possessions (a minimalist home could mean lower premiums).  

When do I need to start coverage?

It makes sense to get home insurance early (yes, like before your move-in day). This can give you peace of mind that you’re covered from day one.  

When you buy a property, your responsibility as the homeowner can kick in at different times depending on the state your home is in. It could be during the settlement period, on the settlement date, or when both parties have signed the contract. This means you’re on the hook for any damage or loss, even if you haven’t moved in yet.  

Also, note that if you’re buying a home with a mortgage, your lender might require proof of building insurance before they release the funds. Even if it’s not mandatory, it’s wise to have the policy lined up to ensure you’re protected from the moment ownership transfers.  

What’s an insured event?

An insured event is a specific scenario or type of damage that your home insurance policy will cover. Common examples include: 

• natural disasters like storms, floods, and bushfires
• theft or attempted theft
• vandalism
• storms and rainwater
• explosion
• earthquake or tsunami
• burst pipes.

It’s always worth checking your product disclosure agreement (PDS) to understand the events you’re covered (and not covered) for. 

How do I make a home insurance claim?

While every insurer may have their own claims process (it’s worth checking their website or giving them a hoy to clarify), here’s what you generally need to do: 

1. First things first – make sure you and your property are safe. Do what you can to stop any more damage, loss, or liability.
2. If there’s been theft or malicious damage, report it to the police and get a copy of the police report. 
3. Give your insurer a buzz or jump online to let them know what happened. 
4. Be ready to show proof that you own the items or property you’re claiming for, along with their value. This includes any documents, letters, or emails about your claim. 
5. Check with your insurer before organising repairs or paying anyone – unless of course it’s urgent to stop further damage. 
6. Set up a time for your insurer (or their assessor) to visit. They will check out the damage or investigate what caused it. Try not to discard or fix anything until they’ve had a chance to inspect it. 

What should I know about buying home insurance for the first time?

While there’s no such thing as the single best homeowners insurance for first-time home buyers, it’s worth finding the policy that works best for you. Here are some handy tips for getting home insurance for your first property: 

Compare home insurance today

Getting home insurance isn’t just about protecting your new digs – it’s about keeping your sanity intact. Sorting through policies, weighing up premiums, and decoding the inclusions and exclusions isn’t exactly anyone’s idea of fun.  

That’s where iSelect comes in. Once you’re ready to dive deep and explore policies, we’ll lay out various home insurance policies side by side. Leave the heavy lifting to us and you can focus on the more exciting things, like picking out furniture and decorating the nursery.