Home and Contents Insurance in Australia: What It Covers, What It Costs, and How to Compare (2026)

Two distinct policies cover two distinct categories of risk:

• Building insurance (home insurance): Covers the physical structure of your home - the walls, roof, floors, fixed fixtures (kitchen, bathroom, built-in wardrobes), fences, garages, and other permanent structures on the property. Required by mortgage lenders as a condition of home loan approval. Also covers other structures on the property such as sheds, carports, and retaining walls.
• Contents insurance: Covers your personal belongings inside the home - furniture, appliances, electronics, clothing, jewellery, and other possessions. Available to both homeowners and renters. Renters need contents insurance only - the building is the landlord's responsibility.
• Combined home and contents: Most Australian insurers offer combined building and contents policies with a single premium and policy document. Usually more convenient and sometimes cheaper than two separate policies.
• Strata properties (apartments): In a strata title property, the owners corporation's building insurance covers the common areas and building structure. Apartment owners need contents insurance for their personal belongings, and may want 'lot owner' cover for internal fixtures not covered by the strata policy - check your strata insurance certificate of currency to understand what is and is not covered by the building policy.

Under-insurance is the most common and most costly home insurance mistake:

• Building sum insured: Should equal the full cost of rebuilding the property from the ground up - not the market value (which includes land). Rebuilding costs include demolition, materials, labour, architect and engineer fees, council approvals, and any additional costs from building code compliance. Rebuilding is typically more expensive than the market value of the structure alone.
• The under-insurance problem: ASIC research has estimated that up to 80% of Australian homes are under-insured. If you insure your home for $400,000 and the actual rebuilding cost is $600,000, you are insured for 67% of the real value. Many policies apply 'co-insurance' clauses - if you are under-insured by 33%, claim payouts are reduced proportionally.
• Use a rebuild cost calculator: The Insurance Council of Australia's online calculator (buildingcostcalculator.com.au) estimates rebuilding costs based on property type, location, size, and construction materials. Use this rather than guessing or using the market value.
• Total replacement policies: Some policies offer 'total replacement' cover - the insurer pays the full cost of rebuilding to an equivalent standard regardless of the sum insured. These typically cost more but remove the under-insurance risk. Check the policy terms carefully - 'total replacement' definitions vary.
• Contents sum insured: Add up the replacement cost (not second-hand value) of all your possessions - furniture, electronics, clothing, appliances, white goods, jewellery, tools. Most households underestimate their contents value. A realistic total for a furnished family home is $50,000–$150,000.
• Review annually: Building and contents values change. Review your sum insured every year - particularly after major renovations, significant purchases, or in periods of high construction cost inflation.

Reading the Product Disclosure Statement reveals significant variation between policies:

• Typically covered: Fire, storm, lightning, hail, explosion, impact (falling trees, vehicle impact), malicious damage, theft and attempted theft, and water damage from burst pipes or appliances. Most policies also include temporary accommodation costs if your home is uninhabitable after a covered event.
• Flood cover - check carefully: Flood (inundation from rising rivers, stormwater, or drainage overflow) is often excluded from standard policies or available as an optional add-on. Storm surge (water damage from storms, not flood) is typically included. In flood-prone areas, confirm flood cover is explicitly included before purchasing.
• General exclusions: Gradual deterioration, wear and tear, and lack of maintenance are universally excluded - insurers do not cover things that break down over time. Vermin damage, mould, and structural defects are also commonly excluded.
• High-value items: Standard contents policies cap payouts for individual items - typically $1,000–$3,000 for jewellery, $2,000–$5,000 for electronics. If you own jewellery, art, or equipment worth more than the standard sub-limit, list it specifically on the policy (scheduled items) to ensure full cover.
• Home business: Standard home insurance excludes business equipment and liability arising from running a business from home. If you work from home with employer-provided equipment or your own business assets, check whether your home policy covers these or whether separate cover is needed.

A structured comparison at renewal time consistently beats loyalty to existing insurers:

• Compare at renewal: Home insurance premiums increase at renewal - often significantly (10–20% per year in recent years due to rising claims costs and reinsurance pricing). Never auto-renew without checking the market. Comparison sites (Compare the Market, iSelect, Canstar) provide simultaneous quotes.
• Check included vs optional cover: Flood cover, accidental damage, and motor burnout are common optional add-ons. Compare policies on an equivalent basis - a cheaper policy without flood cover is not comparable to a more expensive one that includes it.
• Increase excess to reduce premium: A higher excess (the amount you pay at claim time) reduces your annual premium. A $1,000 excess vs $500 excess might save $150–$300/year. Set the excess at a level you could comfortably afford to pay when claiming.
• Call your existing insurer: After getting a competitor quote, call your current insurer with the quote and ask them to match it. Many will - retention is cheaper for them than acquisition. This 5–10 minute call regularly saves $200–$500.
• Bundle discounts: Some insurers offer discounts for holding home, contents, and car insurance together - quantify the combined discount against the cheapest standalone options.

Home and contents insurance protects your most valuable asset - reducing everyday running costs keeps more of your income available for the premiums and priorities that matter. Roopon membership delivers partner discounts on groceries, fuel, dining, and more. Members receive FREE included prize-draw entries per their plan and published campaign terms.

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