Protecting your home and contents
10th February, 2020
Australia has often been called ‘the lucky country’, however
we are not immune to the forces of nature. Fires, floods and cyclones are just
some of the natural phenomena that can impact our lives and property. Here we explain briefly how building,
contents and landlord insurance can help.
Building and contents insurance can protect you against
financial loss, but it’s important to have the right amount and type of cover.
If you underinsure to save money, or because you haven’t kept insured values up
to date, you won’t be fully covered if something goes wrong. If you over
insure, you may be paying higher premiums than you need to.
Sometimes following a natural disaster or significant weather event, it can be harder to obtain building or contents insurance. You may have to contact several insurers to find one that will offer you suitable cover. Serving ADF members may find the Defence Service Homes Insurance Scheme can offer suitable cover.
Get the right cover.
Building and contents insurance, while often bundled together for homeowners,
are actually separate policies, and if you own an investment property, you should
consider taking out landlord insurance.
Building insurance
Building insurance protects you against things that are out
of your control, such as damage from storms, floods and bushfires. It covers
the cost of replacing or repairing your home, including fixtures such as lights
and built in appliances.
Typically you have a choice of:
- Total
replacement – which covers all the costs to rebuild your home to the
standard it was prior to an insured event.
- Sum-insured
– which covers you up to a set amount.
There are variations to these two basic models, so read the
fine print and ask questions if there’s anything you don’t understand.
If your property is under strata title, for example an
apartment or townhouse, building insurance is usually organised by the strata
manager and paid for as part of your strata fees. Check with the strata manager
that adequate building insurance is maintained.
Contents insurance
Contents insurance covers the cost of replacing or repairing
the possessions you keep inside your home, such as furniture, clothes,
appliances, tools and jewellery. It also covers fittings such as curtains,
blinds, carpets and lights.
If you are renting or in service accommodation, it’s still a
good idea to take out a contents insurance policy to cover you for loss of or
damage to your belongings.
Be aware that most insurers will require you to list
collections and other valuables separately if you want them to be covered under
the policy. If in doubt, ask your insurer when you are arranging cover.
Landlord insurance
If you have an investment property, landlord insurance may
include cover for:
- Building – similar to standard building
insurance.
- Contents – for things like curtains, blinds,
light fittings and carpets, not covered by building insurance.
- Loss or damage caused by your tenants.
- Loss of rent as a result of some tenant actions.
As with all insurance policies, cover may differ between
insurers so read the fine print to be clear on exactly what is and isn’t
covered.
You’ll find more information in our insurance
money guide.
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