Moving into your first home is an achievement any Australian would be proud of. Understandably, you may be concerned about maintaining the condition of your house. This is one reason you might consider buying your first homeowner’s insurance policy even before you move in, if possible.
You may need to get your home thoroughly inspected when purchasing home insurance, which can help you understand what to cover in your potential insurance policy to protect your home and belongings from unexpected events.
There are a few crucial points to remember when buying home insurance for the first time, such as knowing exactly what your insurance policy needs to cover and to what extent. For instance, you may want to buy insurance for your belongings as well as your home, or you may need to purchase additional accidental damage coverage if you live in an incident-prone area.
Your insurer may also require you to make some refurbishments to your home as a precaution, such as adding fireproofing if your area is likely to be affected by bushfires, or termite protection if you are near a wooded area.
What does my home insurance policy need to cover?
When buying homeowner’s insurance for the first time, you will likely be confused about the terms used by your insurer. An easy way out is to take a good look at your property and inside your home to gauge what items would be expensive to repair or replace.
You may have solar panels installed on your roof, for instance, or you may have splurged on high-quality fencing for your home. Similarly, you might own a high-end home theatre system or an art collection. Your insurance policy should adequately cover the cost of renovating or repurchasing such items.
A home insurance policy will usually cover all the fixed items on your property, but if you want to get insurance for your belongings as well, consider buying home and contents insurance. You may need to purchase additional coverage and sometimes even a separate insurance policy for your high-value items.
Preparing a list of all the objects you want to include in your insurance policy is an excellent place to begin thinking about the policy’s coverage, and can be useful in discussing coverage limits with the insurance provider.
How does my home location affect my home insurance policy?
You may have purchased your first home in a location that’s ideal for your household needs, such as proximity to the workplace or schools, safety in the local community, etc. It is not very likely that you’d have factored in the possibility of disasters or vandalism, which can be a concern when buying home insurance for the first time.
- For instance, if your home has a high Bushfire Attack Level (BAL) rating or is an area prone to theft, coverage for those incidents can prove expensive and may require you to pay more for home insurance.
Consider visiting the local council office for the area where you are buying your first home, to get information around any adverse conditions you might have to face. Consider asking your neighbours which insurers they recommend.
If you’re buying an insurance policy to fulfil your home loan requirements, the mortgage lender may also be able to suggest an insurance provider familiar with the area. You may also want to compare home insurance quotes online to check if there are providers other than those recommended who might offer you a more convenient home insurance rate.