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What is included in your home and contents insurance policy?

Mark Bristow avatar
Mark Bristow
- 4 min read
What is included in your home and contents insurance policy?

We all want to protect our homes and valuables from unforeseen disasters, but in case the worst does happen, you need to be confident you could afford to renovate the house and recover the cost of your valuables. This is where home and contents insurance comes in. 

Australian insurers offer combined home and contents insurance policies, which typically cost less than buying separate insurance policies. If you are considering buying such a policy, make sure it covers your home and all your high-value items adequately.

While the exact details may vary between insurers and policies, most home insurance policies will cover:

  • Your residential building
  • Outbuildings like your garden shed and fences
  • Permanently attached fixtures (e.g. built-in wardrobes, solar panels, air conditioners, kitchen cupboards, dishwasher, fixed floor coverings, awnings etc.)
  • Permanent structural improvements (e.g. a home extension)

Similarly, most contents insurance policies will cover:

  • Furniture and furnishings
  • Computers and electrical appliances
  • Kitchenware
  • Clothing and shoes
  • Jewellery, sunglasses and cameras (extra cover may also be required)
  • Fitted carpets and rugs
  • Internal blinds, curtains and window coverings

Events that your insurance policy may cover include:

  • Storm, rainwater and flood (sometimes optional)
  • Fire or smoke
  • Theft or burglary
  • Escape of liquid (e.g. burst pipe)
  • LightningImpact damage (e.g. fallen trees)
  • Breakage of glass, ceramic and sanitary fixtures
  • Malicious damage, vandalism, riot or civil commotion
  • Explosion
  • Earthquake or tsunami

Why do I need home and contents insurance?

Purchasing a home and contents insurance policy is one way to reduce any stress you may have about damage to your home and belongings. Usually, this kind of policy pays for the cost of renovating or repairing your home, including any permanent fixtures on your property such as fences, sheds, and solar panels. Some insurers may also cover the cost of any urgent repairs needed to prevent further damage after a disaster. 

Additionally, contents insurance helps you recover the cost of your possessions which may be damaged, vandalised, or stolen, or may offer new for old replacements.

Consider checking the optional coverage your insurer may be able to provide. For instance, will the insurance provider pay for you to rent another house temporarily while your home is being renovated or repaired? Also, if you need to tear down and rebuild your home but are still paying off your home loan, ask if your policy covers a discharge fee for the mortgage. 

Since the details of an insurance policy vary with each provider, you should read your insurer’s Product Disclosure Statement (PDS) to learn more about the exact events covered by the policy, the coverage limits, and any exclusions. 

How much does home and contents insurance cost?

The cost of your home and contents insurance policy’s premium will depend on the type of home insurance coverage you prefer.

You can opt for either insured sum coverage, which is a predetermined, fixed amount, or for total replacement cost coverage, which pays for rebuilding your home from scratch after a disaster. Sum-insured home insurance policies may have lower premiums than total replacement policies, but you may be at a higher risk of finding yourself underinsured in a disaster.

The insurance premium also depends on how much excess you choose to pay when you make a claim.

You’ll likely also need to list the value of your home’s contents, particularly high-value items like smart TVs, jewellery, and collectibles, and check how much coverage the insurance provider offers for each.

While you need to make sure that your policy covers the full value of your belongings, you can choose the coverage limits and inclusions based on the premium you are comfortable paying. For instance, you may want to buy a standalone insurance policy for some individual high-value items, even if it costs you more, to ensure that you cover the full value of each item.

Adding other types of optional coverage, such as portable contents cover for personal effects that you carry with you while travelling, or coverage for specific high-value jewellery, can also drive up the premium you pay for your insurance policy. 

You may need to pay a higher premium if you live in an area prone to incidents like floods or thefts, and you may also need to purchase additional coverage for the specific incident to avoid ending up underinsured. Consider checking with your local council office or your neighbours to know if your home is in an area prone to floods or bushfires before you negotiate the details of your home and contents insurance policy. For instance, you can find out about your home’s Bushfire Attack Level (BAL) rating and compare insurance quotes for similarly rated properties.

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Product database updated 21 May, 2024

This article was reviewed by Personal Finance Editor Peter Terlato before it was published as part of RateCity's Fact Check process.

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product data updated on

Product data updated on 21 May 2024