The handy guide to home insurance quotes

Before you decide on which home insurance policy to commit to, it’s a good idea to think about how to get a home insurance quote. Because home insurance products and each level of cover can vary widely, it’s important to find an insurance policy that’s right for your situation and budget.

 

Here we’ll help you understand some of the important terms upfront, so you’ll be well prepared when you do your research so you can get a home insurance policy quote that's right for your situation.

 

12 minute read

What you'll learn

• What is home and contents insurance?
• Types of home insurance available
• Work out how much home insurance you’ll need
• How to compare home insurance features, optional covers and premiums
• Why staying on top of your home insurance policy is important

What is home and contents insurance?

Home insurance is a great way to protect one of the biggest assets you own - your home, and the items inside it. This insurance is made up of building insurance, which covers the building itself, and contents insurance, which offers repair or replacement cover for your personal belongings at your home.

Things to look out for

Finding a home insurance policy that suits your needs can involve a bit of research.

 

For instance, some home insurance policies are more comprehensive and include insured events such as fires and damage caused by storm, plus things like theft, accidental damage and broken glass, while others are more basic with limited cover.

 

Some automatically include flood cover and temporary accommodation as standard, while others will offer these as optional covers and charge extra on top of the minimum premium if you choose to opt in.

 

It pays to think about the types of insured event that are likely to impact you because this will help you choose cover that's right for you.

 

Types of home insurance

When you’re looking to get a quote for home insurance, it helps to understand the different types available. Below you can briefly explore the main features of building insurance and contents insurance, to decide on the right type of cover for you.

 

There are also options for investment property owners, usually referred to as landlord insurance. In addition, if you rent, you could consider contents insurance to protect your personal belongings.

Home building insurance

Also known as building insurance, home insurance covers the repair or rebuild of the physical structures of your home buildings including your garage and outbuildings if they experience things like malicious or accidental damage, or are totally destroyed.

 

It can also cover malicious or accidental damage to fixtures like your fences and paved driveways, and built-in appliances like hot water systems and air-conditioners.

What’s included and what’s not?

With many policies, home insurance covers certain events as standard (insured events) while others are not covered unless you choose to add them. The type of events which may be covered under ‘insured events’ include damage caused by storm, fire, earthquake, impact, theft, vandalism, and more.* Different insurers cover different events, and there may be exclusions and waiting periods to think about.

 

Sometimes you may need to add these events to your policy at an additional cost. This can apply to things like floods, landslides, smoke damage, or accidental breakage of glass, ceramic or other items. There are also things that will almost never be covered by any insurer, like damage from acts of terrorism or actions of the sea.

 

Some insurers offer additional extras like temporary accommodation for people (and even pets) while you repair or rebuild your home. Insurers generally also offer legal liability cover to protect you as a property owner should someone be accidentally injured at your property.

 

It’s important to check with your provider to see what’s included in your policy and what’s not so you don’t have any surprises if you need to make a claim.

 

 

Find out more about Building Insurance available through Westpac.

Contents insurance

Contents insurance is a type of insurance designed to protect household items like furniture, electrical appliances, white goods, computers and linen, and personal items like clothing, shoes and more. Sometimes, insurance for contents covers valuable items for specific amounts, depending on the policy.

What’s included and what’s not?

Contents insurance provides cover to repair or replace your contents up to certain limits under what’s called the ‘sum insured’. For some individual items there may be a set limit, but you may also be able to specify a replacement value outside those limits, usually only for specific valuable items.

 

There may also be an option to insure specific contents when they are taken outside the home. This is known as portable contents insurance and provides cover for things like laptops, phones, jewellery, cameras and musical instruments. Some may be covered under general contents, while others need to be listed (usually at an extra cost) and there may be cover limits and exclusions.

 

Other cover options like accidental damage cover and cover for motor burnout may be available, but these may come with an additional cost.

 

 

Find out more about Contents Insurance available through Westpac.

What isn’t covered by home and contents insurance?

There are things to watch out for when it comes to home and contents insurance cover that may not be covered at all. Things like damage caused by termites or certain actions of the sea such as king tides, coal seam gas related damage, intentional damage caused by visitors to your home (if they were invited there by someone), illegal contents, acts of war and so on.

 

Home insurance customers should check the relevant product disclosure statement to get a full picture of the things that are covered under an insurance policy, and those that are not.

A word on landlord insurance

If you have an investment property that isn’t part of a strata, Landlord insurance protects the physical structures, fixtures and built-in appliances like hot water systems and air-conditioners. If you are in a strata, you may want to consider landlord insurance for contents, to cover any contents that you have provided for your tenant like furniture, carpet and appliances. However, tenants are responsible for insuring their own personal belongings.

 

In addition, some insurers will provide cover for rent default and theft by a tenant for an additional premium cost.

 

 

Find out about Landlord Insurance available through Westpac.

A word on insurance for renters

In most cases, when you are renting you only need cover for your personal belongings. The landlord or body corporate is generally responsible for insurance on the building itself or it’s covered by residential strata insurance.

 

Contents insurance is great for renters, as it can cover things like:

• Loss of your contents under an insured event
• When you’re moving house
• Emergency contents storage 
• Food or medicine spoilage 
• Outdoor contents
• Personal belongings

 

Find out more about Contents Insurance available through Westpac

Working out the level of cover you need

Now you've learnt about the types of home insurance available, it's time to decide on the level of cover you need and crunch some numbers.

 

Before you can get going on a quote, you’ll need to work out your ‘sum insured’ – that is, the maximum amount of money a home insurance company might pay out if you make a claim.  

 

The sum insured is the value your property is covered for, be it your home, personal belongings or both. Working out the sum insured is a critical part of getting a level of home and contents insurance you are comfortable with.

 

This amount should ideally cover the cost to rebuild your home (building sum insured) including any renovations or upgrades you have made since you purchased the property. It should also cover the replacement cost of your possessions (contents sum insured) in the case where things are totally destroyed. Don’t forget those extra things that have to be covered separately.

 

It’s important to note that the ‘sum insured’ isn’t a guaranteed payout figure if you need to make a claim, it just means an insurance company will pay to repair or replace your contents or rebuild your home up to that amount. 

How do you calculate your ‘sum insured’?

The easiest way to calculate a sum insured amount is to use online insurance calculators. These calculators ask a series of questions about your home and contents and then give you an estimate of the amount it would cost to repair or replace your home or your contents (the sum insured). You can use this amount when you are requesting your online quote.

 

There are two types of insurance calculators:

Home building calculator

A Building calculator^{^} is a very handy way to working out a relatively accurate ‘building sum insured’ based on detailed questions about your building.

Contents insurance calculator

A Contents calculator^{^} can help you work out a realistic amount or ‘sum insured’ for your contents.

 

Remember, the sum insured should cover the cost to repair or rebuild your buildings or contents. It is critical to ensure adequate coverage so you aren’t left out of pocket should a disaster strike. This is known as ‘underinsurance’ and is something that’s more common that you would expect.

What is underinsurance and how to avoid it?

Underinsurance is where your ‘sum insured’ doesn’t cover the full rebuild cost of your property or the full replacement value of items lost. Being underinsured is a huge risk and could lead to significant financial strain if you need to make a claim following an insured event.

 

Overinsurance, on the other hand, is where the ‘sum insured’ for your building and/or contents is more than what it would actually cost to repair or replace your home or your belongings, or possessions have been included that you probably won’t replace. In this case, you are likely to be paying a higher premium than necessary.

 

Good news, home insurance calculators are a great place to get a more accurate picture of the value of your building and contents, but they only provide estimates based on averages. When determining the current replacement value of your buildings and contents, it’s a good idea to consult an architect, a builder or a valuation expert. 

Comparing home insurance policies

Getting a quote is a great way to compare different insurance policies – especially if you’re thinking of switching home insurance providers.

Remember though, the cost of the insurance can be based on many different factors. So, when you are comparing policies, it’s important to check the product disclosure statement to help make sure you are comparing like for like.

Think about things you think you’ll need, and make sure you include them in your quote request. 

Some questions to ask yourself about home insurance policies

What features and options are available? 

Is there legal liability cover, is there optional accidental damage cover, is flood cover standard or optional, is there motor burnout cover on electrical appliances. How much extra does optional cover add to the premium?

Which insured events are covered by the policy?

Is flood cover optional or considered an insured event? Are there particular limitations or restrictions on an insured event? What about waiting periods? There are many things to consider.

What limits and exclusions are there?

There are certain things home insurance policies will not usually cover like deliberate malicious or criminal acts by you or people you have invited to your home, acts of war, wear and tear, or even actions of the sea. It’s a good idea to familiarise yourself with the product disclosure statement to work out any limits and exclusions and how they might affect you.

How much should I choose for my ‘sum insured’?

There are not only insurance calculators available to help you work out your building sum insured, but also your contents sum insured. Check out these calculators as a starting point. It’s also a good idea to consult professional valuers and assessors when you are working out your sum insured.

Are there any discounts available?

Keeping the cost of your premiums to a minimum where possible can be a great budget saver. So, when you get a quote, make sure to check whether more than one discount is available, for example if you combine home and contents insurance, or if you have a good home insurance claims history. If you’re eligible for multiple discounts, some insurers will only apply the discounts until you reach a minimum premium threshold.

What are the payment options?

Is there an annual premium or can you pay by the month? Check to see whether monthly payments attract an extra charge too.

 

When you receive your quotes, you should spend a bit of time going over them to make sure you are comfortable with what you’re covered for before you decide what to do.

What affects a home insurance premium?

The cost of insurance is called a ‘premium’. How much the premium is, may be affected by a number of factors:

1. Your risk profile, including where you live, the type of property you’re insuring, the amount and type of cover you require, the people insured under the policy, your claims history, and the likelihood of a claim being made on your policy.
2. Any discounts that may apply.
3. Compulsory government charges such as Stamp Duty (varies by state) and GST.
4. Emergency / Fire Services Levy if they apply in your state.
5. The excess you choose –a lower excess may result in a higher premium.

These factors are usually reviewed each year, which may affect your premium at renewal. If you make any changes to your home insurance, the premium will be affected too.  

Staying on top of your policy

Once you have decided on a policy, it’s important to review it regularly. That way you can make sure you maintain adequate and relevant insurance cover should your circumstances change.

 

Over time your property value may go up (or down), you might do a renovation, you could buy new furniture, art or jewellery, or the cost of building materials could increase in general. Taking a simple look at your credit card statement may be one way to recall what you’ve purchased, and you could actually be surprised.

 

All these things can affect the amount you need to be insured for, and your premium, so an annual policy check-up can help you avoid any nasty surprises at claim time.