What is Home & Contents Insurance? 

For many Australians, owning a home is a dream come true. After years of working and saving up, we all look forward to the day when we can live under a roof that we can proudly call our own. So, it’s important to get the right type of insurance to ensure our financial security and peace of mind.

Home and Contents Insurance covers the cost of repairing or replacing your house and your belongings when something goes wrong – like a fire, burglary, or a visitor getting injured. It also offers financial protection in case of disasters like severe storms or an earthquake. Our beloved homes can even be damaged by trees falling or hail damaging roof tiles. 

Why is Home & Contents Insurance important?

Our home is often our largest asset, so having the right insurance cover can really help if the worst happens. The insurer can arrange repairs or rebuilding and pay the costs of moving temporarily and putting contents in storage if the house is so badly damaged it can’t be lived in. They’ll also pay legal defence costs and damages awarded by a court if someone is injured on your property. 

Contents Insurance is usually purchased along with cover for the building. So for example, if the roof is damaged in a storm and water causes damage to the interior furniture or clothes, it’s all covered by the same insurance company. 

Having the incorrect type of cover could mean you have to find the money to pay for these things yourself. Banks and finance companies also require Home and Contents Insurance when you borrow from them.

What does Home Insurance cover?

Standard homeowner’s policies typically cover a list of insured events, including:

• fire and smoke
• storm
• cyclone
• rainwater
• explosion
• burglary
• vandalism. 

Other insurance companies offer more than the standard cover – for example, accidental damage, motor burnout, and artwork or valuables taken outside the home. It’s also important to compare insurance policies as they vary considerably. Some cover damage to retaining walls, landscaping, and flood and water leaks, while others don’t.

Checking and understanding what is covered and what isn’t (often called an 'exclusion’) is key to understanding the insurance you purchase. Some items also have limits – for example, jewellery may only be covered up to $1,000 per claim, unless items are specifically listed.

Choosing your insurance policy

Before you buy insurance, we recommend checking:

• Cover type – is it a standard cover (listed events) or accidental damage cover?
• Will the home be your main residence or a holiday home?
• How much cover is there for jewellery or special items?
• Have you used a free online calculator to find out the rebuilding cost of your home and the replacement value of the contents?
• Do you need cover for bikes or other sporting equipment?
• What is the condition of the home? Most insurers don’t pay for water leaks from cracked tiles or rusted gutters.
• The location of the home – is it in a flood or bushfire-prone area? Some insurers may not cover certain streets or suburbs.

At Insurance Advisernet, we can help you ensure the valuation of your home and contents are up to date. Our professional advisers will also discuss your needs and advise which insurer and type of cover best suits your situation and budget.

Frequently Asked Questions

●    How much does home & contents insurance cost? 

The typical cost of Home & Contents Insurance, as well as the cover, varies across Australia. The monthly average is around $110 in NSW and $100 in Victoria, while in Queensland, it can range from $120 to $360 per month for Far North Queensland. This is why it’s worth getting quotes from different insurance companies and for different levels of cover. 

Premiums are generally based on:

• location
• what the home is built of
• the age and type of occupancy
• past claims experience.

Is home insurance mandatory?  

No, but banks or finance companies will require Home Insurance to ensure you can have your home repaired or rebuilt if damaged. It’s also common sense to make sure your most valuable assets are protected in the event of storm or fire.

●    What areas are covered in a typical Home & Contents policy? 

There are typically three areas covered by a homeowner’s insurance plan:

1. Building – covers the house and any carports or garages, as well as the fixtures and fittings, like pipes and carpets. Basically, this is for anything that you wouldn’t take with you when you sell the home. Some policies cover any type of accidental damage, while others more limited (and cheaper) cover for fire and listed perils, including wind, rainwater and storm damage.
2. Contents – covers anything you would take with you when you leave, such as rugs, furniture, beds and sporting equipment.
3. Valuables – generally only provides very limited cover for jewellery, bikes that are taken away from the home, and artwork. So, it is important to understand the difference between insurance policies and what suits you. 
    

How much Home & Contents insurance do I need? 

Everyone’s situation is different, but some major factors to consider are the square foot measurements of the house plus the construction costs to rebuild damaged or destroyed houses. With Covid related shipping delays and inflation, the replacement costs of both the home and contents have increased 10% to 25% over the past year, so it’s essential to get advice and check with an up-to-date online calculator. If you don’t have enough insurance cover, you may end up paying for part of the repairs, which could be expensive and delay the work.

What is Strata, Body Corporate & Community Association Insurance? 

Strata, Body Corporate & Community Association Insurance is compulsory for risks such as fire, storm and public liability if visitors or guests are injured on the property. Although the only compulsory covers are for public liability and fire/damage to the building, most committees chose to include most sections of cover, as it’s easier to budget for the annual premium rather than ask for money to cover urgent repairs.

Insurance companies have specialised packages for these types of risks, that include both compulsory cover and optional cover such as:

• Damage – to the building and common areas from accidental damage, fire, storms or theft.
• Catastrophe Cover – which increases your building sum insured to cover higher rebuilding costs if a catastrophe impacts your area.
• Loss of Rental Income – if you have tenants. 
• Alternative Rental Costs – if you are an owner occupier and have to move out while the building is repaired following a fire or other damage.
• Public Liability – covering injury to the public and visitors or damage to their property.
• Breakdown – of machinery and key electrical equipment.
• Office & Committee Members – covering actual or alleged breach of duties as a committee member, legal defence costs and court-awarded damages
• Voluntary Workers' Personal Accidents – covering residents injured when undertaking voluntary work around the property.

What does Strata Insurance cover?

Compulsory covers are:

• Damage – covers the building, common areas, swimming pool, car parks, walls and ceilings, lifts, spas, tennis courts and common contents against accidental loss or damage. However, it doesn’t cover the contents of the owner’s unit, apartment or townhouse. This is each owner's risk and we recommend having your own cover for personal liability and contents.
• Loss of Rental Income or Alternative Rental Costs – will reimburse the owner for loss of rental income if the property is tenanted. If you’re an owner occupier, the insurance will pay for temporary costs to move, place items in storage and rent an alternative apartment if your unit is too damaged to live in and is being repaired.
• Public Liability – covers the property for both legal defence costs and damages if a guest or visitor is injured and their property is damaged.

Optional covers include: 

• Machinery & Electrical Equipment Breakdown – covers the cost of repairing key plant, machinery, and electrical equipment (switchboards, air conditioning, lifts etc.) if damaged due to sudden internal failure. These items are essential for buildings and can be expensive to repair or replace.
• Office Bearers & Committee Members – protects the office bearers and members personally against alleged or actual acts of mismanagement of the property. Without this cover, members will have to personally pay their own legal costs and any damages.
• Voluntary Workers' Personal Accident – covers volunteers working around the property for accident benefits, as well as domestic assistance, weekly cash payments and travel costs to attend medical appointments.

How are Strata Insurance premiums calculated?

The key factors include: 

• location, including exposure to flooding, bushfires etc.     
• age and condition of the building
• whether the building contains asbestos
• replacement cost of the building, including car parks and facilities
• claims history - the number, type and total cost
• commercial activities carried out in the complex (if any) - what type, whether they are take-aways, supermarkets or professional offices
• the presence of swimming pools, spas or commercial car parks
• optional covers are to be insured.

Frequently Asked Questions

What is strata body corporate and community association insurance?

Strata, Body Corporate & Community Association Insurance are packages of insurance covers specifically designed for residential and commercial properties. They provide cover for fire, machinery breakage, public liability and other risks.

Who buys strata body corporate and community association insurance?  

This insurance is purchased by the committee for all the owners, with the premium cost divided between each owner. The committee also decides on the types of covers chosen from what is available in the package, the excesses per claim and the amount of insurance/ sum insured. The decision is usually based on advice and recommendations from a professional insurance adviser.

Is strata, body corporate and community association insurance compulsory in Australia? 

Yes, Strata, Body Corporate & Community Association Insurance is compulsory for risks such as fire, storm and public liability if visitors or guests are injured on the property.

What do strata, body corporate and community association mean? 

This is a general term, depending on your state or territory, that refers to a group of people that together own a building or property with a number of buildings, usually including car parking, swimming pools, gardens, lifts and common areas. These can be either residential strata or commercial properties, or a mixture of both. 

Why do we need strata, body corporate or community association insurance? 

Some amount of Strata, Body Corporate & Community Association Insurance is compulsory in all states and territories to ensure owners have cover for repairs for major damage to the building – for example, from fire or storm – or lawsuits from personal injury claims, where legal costs and damages can be substantial.