How much Home Insurance cover do I need?

There are many different types of homes and insurance options to cover them. It may seem daunting to navigate all the extras and find a place to start.

When buying insurance, it is a good idea to focus on what you need, and what is (and isn't) covered by different policies. Generally, Building Insurance will cover the cost of repairing or rebuilding the physical structure of a property and Contents Insurance will provide cover for your personal possessions.

Understanding total replacement and sum-insured cover

Total replacement covers all the costs to rebuild your home to the standard it was before it was damaged. A total replacement policy means you won’t have to worry about any shortfall to repair or rebuild your home.

Sum insured provides cover up to a set amount to repair or rebuild your home.

It is up to you to determine the total replacement and sum-insured cover for your home. Here are a few things to consider.

How much should you insure your building for?

Rebuilding costs generally go up over time and building codes change, the result being if you’ve lived in the same place for a while, the costs associated with rebuilding may have changed significantly. Let’s say for example when you first moved in to your home it was insured for $250,000. Fast forward to the present day and it could cost $400,000 to replace. If you haven’t updated your insurance, that’s a big gap in your cover.

The amount you insure for is known as your building sum insured.

• The cost to rebuild your house depends on things like size, design, features, materials, and ground slope
• It includes any permanent features such as timber floors, verandahs, carports and pools
• But it shouldn’t include the land value.

To help you to receive an accurate estimate on the replacement value of your home, you can use the Building Calculator¹ – it’s a prepopulated form using industry data collated by CoreLogic. It’s also a good idea to check what's covered in your insurance policy.

How much should you insure your contents for?

When determining how much to insure your contents for, add up the cost to replace them today and not what you paid for them. Ask yourself, how much would it cost if I had to buy all new contents today?

The amount you insure for is known as your contents sum insured.

• An easy way is to go room by room, and make a list of all the items and their replacement costs
• Your Contents includes carpets, rugs, curtains, internal blinds and shutters, and even the food in your freezer.

To help you estimate the value of your contents, you can check what's covered and use the Contents Value Calculator¹.

Keep your sum insured on your Building and Contents Insurance up to date 

You can change your sum insured at any time to ensure you remain adequately covered. We recommend you review your cover regularly, to take into account things like:

• Upgrades or renovations
• Changes to the costs of labour and materials to repair or rebuild
• Changes to building codes and regulations
• Increases in the replacement value of your belongings
• New purchases and gifts.

You’ve got a safety net just in case

Many home insurance policies will include a safety net, which means if your sum insured is not enough to cover rebuilding, repairing or replacing your building and contents, there is an additional financial buffer to cover the difference.

For example, construction costs often increase after a widespread storm, flood or bushfire because the demand for labour and building materials is higher.