Building insurance provides cover to make repairs or rebuild if your home is damaged or destroyed by specific events, such as fire, flood, storm or earthquake. It may also provide cover for losses from accidents, such as wine spilling on your carpet.
Most policies cover the main dwelling, garage and outbuildings, walls, gates, fences, drives, verandas, patios, in-ground swimming pools and landlord’s fittings and fixtures.
The premium for building insurance is based on a number of factors including age of your home, location of your home, construction of your home and sum insured.
Some building insurance policies provide complete replacement cover.
Contents insurance provides protection against damages to, or loss of, your personal possessions, such as clothes, toys, furniture, whitegoods, stereo, TV, electrical appliances and computer equipment. Valuable items like jewellery may have special claim limits in a standard policy. You should separately value and list expensive personal possessions, otherwise these items may not be covered for their full value or in some instances may be excluded from a claim.
The premium for home contents insurance is based on a number of factors including your age, location of your home, level of home security and the sum insured.
Some home contents insurance policies also provide cover for personal possessions or valuables away from home, such as sports equipment or cameras - although there is usually a limit for unspecified items. You should not consider this cover a replacement for travel insurance.
If you have the option to combine your building and contents insurance together with other insurance products, such as motor vehicle insurance, you may be able to receive a 'multi-policy discount'.
What type of home contents policy?
Some people are happy with insurance that defines specifically what’s covered - these policies are called 'defined' events policies. Other people prefer to be covered for any potential mishap - these policies are known as 'accidental damage' policies. Some insurers offer defined events policies with an option to pay extra for accidental damage cover.
You will also have to choose between 'indemnity' or 'replacement' cover. Indemnity policies will only reimburse you for the value of your possessions in the condition they were in just before they were damaged or stolen. It’s wise to look for a policy that offers new-for-old replacement cover, otherwise the payment you receive may not be adequate to cover the loss of your belongings.
Personal liability insurance
Most home contents insurance automatically includes personal liability insurance. This covers you should another person be injured or have any of their property damaged while on your property - for example, if someone in your house falls down the stairs. However, it does not cover people who work in your home, such as cleaners or contractors.