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 What is Home and Contents insurance?
A simple way you can guard against financial loss caused by theft or damage to your home and contents. You pay a premium and enter into a contract with an insurance company, who promises to pay you a certain sum of money to cover mishaps or perils that could damage your home and contents. The amount of money the insurance company pays you, and the circumstances under which they pay, is subject to the terms and conditions of your contract or 'policy'.
Home and contents insurance also automatically covers your legal responsibility to pay compensation for death or bodily injury to other people, or damage to their property. This 'liability' cover is relevant only when you (the Insured), have been negligent and are at fault.
There are differences in the liability cover provided by a building insurance policy and a contents insurance policy.
Building liability cover
A building insurance policy automatically includes property owner's liability cover. This covers the property owner's legal responsibility to pay compensation for:
- bodily injury or death to another person
- loss or damage to another person's property.
If you're a property owner, you have a duty of care to provide safe premises. If this duty is breached and someone suffers a loss, then you could be liable.
Contents liability cover
A contents policy automatically includes personal liability cover. This covers the insured person's legal responsibility to pay compensation to pay for:
- Bodily injury or death to another person
- Loss or damage to another person's property, that is caused by a personal act or omission of the insured person.
You should read individual insurer's policy documents for exact definitions for what is covered under home and contents insurance.
This is general information and is merely a guide and does not constitute financial advice, nor does it take into account your individual circumstances. You may wish to obtain such advice before making a decision or taking any action.
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Why do I need Home and Contents insurance?
To make sure you have the funds to replace your home or contents, or repair them in the unfortunate event that they are stolen or damaged. Imagine the expense of replacing all those assets you've worked hard to buy and accumulate if your home was suddenly destroyed by fire, damaged by leaking water or stolen by an intruder in your home.
Whilst we often don't like to think about these things happening, the reality is that they could happen - even if you take reasonable care to help guard against a range of mishaps from occurring.
Your home and contents insurance will also cover your legal liability to pay compensation to other people, if you're negligent and it results in their bodily injury, death, or they suffer loss or damage to their property.
For example, if the hand rail on the stairs in your home gives way and results in bodily injury to another person, you could be held legally responsible if you're proven to be negligent.
Therefore, you might have to pay the injured person compensation.
Similarly, if an item of your contents such as sporting equipment, causes bodily injury or death to another person, you could be held legally responsible to pay them compensation, if you've been negligent.
The cost of paying compensation in these incidents could set you back thousands of dollars. But with home and contents insurance, you'll have peace of mind knowing that if any of these mishaps covered in your policy occur, you won't be left out of pocket.
This is general information and is merely a guide and does not constitute financial advice, nor does it take into account your individual circumstances. You may wish to obtain such advice before making a decision or taking any action.
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How much cover do I need?
The amount of cover you need, or the 'sum insured' for your home & contents insurance, should represent how much it would cost you at today's prices, to replace your contents, or rebuild your home.
For example, 5 years ago you may have purchased a television for $350. The 'sum insured' for this item is what it would cost you today, to purchase the same model of television.
Remember when insuring your home, you don't need to include the cost of the land. Your land is not at risk of being damaged by theft or other mishaps covered in your policy.
Use our calculators to estimate the total value of your Calculate the value of your Contents and Home.
You should take care in estimating the replacement value of your contents as it will effect the amount your insurance company will pay you if you make a claim.
This is general information and is merely a guide and does not constitute financial advice, nor does it take into account your individual circumstances. You may wish to obtain such advice before making a decision or taking any action.
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What effects my premiums?
The location of your home
Crime levels differ between suburbs. It will cost less to insure a home in a town or suburb where crime levels and reported theft and insurance claims are lower. Homes built in areas prone to other perils like cyclones, also tend to cost more to insure.
The date your home was built
Homes built more recently are generally less susceptible to fire and other hazards as they have newer water pipes, electrical fittings, roof etc. Newer homes cost less to insure than older homes.
What your walls are made of
This affects how well your house may stand up in the event of fire, earthquake and other insurable mishaps. Homes that have walls made from more hardy materials like brick, cost less to insure.
Whether you've made any household insurance claims in the past
A past claim may indicate you're living in a higher risk location, or may indicate a home security problem. Depending on the circumstances behind your last claim, it may affect your new premium level.
The level of security devices in your home
The better equipped your home is with security devices such as alarms, security screens and window locks, the harder it is for an intruder to enter and therefore the lower the premium.
Whether the property is your main residence
If the property you're insuring is your main residence, there is less chance it will be left unoccupied for long periods of time. Therefore it will be cheaper to insure than a property left vacant.
This is general information and is merely a guide and does not constitute financial advice, nor does it take into account your individual circumstances. You may wish to obtain such advice before making a decision or taking any action.
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How can I reduce my premiums?
Shop around
Household section provides you with a Quicken.Easy way to shop around for insurance. By shopping around, you can get the best policy for your needs.
Get your sum insured right
Avoid wasting money if your sum insured is too high (or losing out if your sum insured is too low). Our calculators can help you estimate the value of your Contents and Home . Please note that it's your responsibility to accurately assess the value of your home. You should see an architect or builder if you want to know exactly how much it would cost you to replace your home.
Improve your home security
Including smoke detectors, window locks, deadbolt locks and an alarm in your home will improve your home security and lower your premiums.
Make home improvements
Structural improvements to older homes will make your home safer and will help decrease your insurance costs. For example upgrading your roof will help make it less susceptible to leaks.
Increase your policy excess
The policy excess is the set amount of money you pay, before your insurer starts to pay your claim. Many insurance companies will allow you to nominate a higher policy excess in order to reduce the premium you pay upfront for insurance cover.
This is general information and is merely a guide and does not constitute financial advice, nor does it take into account your individual circumstances. You may wish to obtain such advice before making a decision or taking any action.
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What should I do when my policy is due for renewal?
Let your insurer know if your circumstances have changed - it could save you money on your next policy! Here are some of the things you should consider before taking out your next policy:
- Have you installed more home security devices since you took out your last policy?
Deadlocks, alarms, keyed window locks, etc could entitle you to a discount on your next premium.
- Have you purchased new household goods that need to be covered by insurance?
Purchases of major items such as a lounge, TV, fridge or stereo system may mean you need to revisit your 'sum insured' to make sure your new items are covered in the event of a claim.
- Similarly, have you bought or been given any valuables like watches or jewellery, which need to be covered?
- Is your photographic equipment covered?
- Are you still living with the same people you were living with when you took out your last policy?
- Is there anyone now living with you that's not a member of your family?
- Have you recently completed any renovations that improve the safety of your home?
- Home additions would also add greater value to your home so you'll need to revisit the 'sum insured' on your next policy.
This is general information and is merely a guide and does not constitute financial advice, nor does it take into account your individual circumstances. You may wish to obtain such advice from an insurer before making a decision or taking any action.
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