Storms, broken windows or other questions about home insurance? Whether you’re buying your first home, or moving into a new place, your home is worth protecting. If you’re just getting started looking into your home insurance options, here are some simple answers to some questions you might have.

“What kind of home insurance do I need?”

You might need two policies: one for the building itself and another for your contents. You can usually save money by combining your building and contents insurance.

If you’re buying a home, your lender may need your building insurance policy details as part of your mortgage paperwork, so it’s a good idea to get a home insurance quote as soon as possible.

What’s building insurance?

Building insurance covers the physical structure of your home – including your roof, walls and windows – and your permanent fixtures and fittings such as your bath, toilet and fitted kitchen.

Depending on the policy you choose, your building insurance will generally be an ’events-based’ policy, meaning it will cover damage caused by certain situations including fire, lightning, explosion, earthquake, theft or attempted theft, riots or vandalism, storms or flooding, falling trees, impact (such as a car driving into your home) and escaping or leaking water that occur during the policy period.

Building insurance usually also covers your legal liability as owner of the property, such as liability for people who may be injured on your property.

What is an insured event?

Insured events are situations under which damage to your home will be covered if they occur. These are usually listed in your Product Disclosure Statement (PDS). For example, if your ceiling collapses due to damage caused by high winds or storm activity, this may be covered as ’storm’ which is generally listed as an insured event in a policy. However, if your ceiling collapses due to structural/building issues, adhesive failure, gradual deterioration or a maintenance related issue, then this may not be covered as it may not be an ’’insured event’ or may be specifically excluded.

What about everything inside my home?

Things such as your furniture, appliances, clothing, guitar collection and jewellery are known as your home contents. Find out the basics of home contents insurance.

Will I be covered for damage if I accidentally kick a footy through my kitchen window?

Always check your policy documents for details of what’s covered. Some policies will include limited cover for accidents such as glass breakage – which, for instance, covers a footy going through your kitchen window. By paying a bit more for your insurance, you can often add accidental damage as an option on your policy.

What’s not covered by building insurance?

Always check your policy carefully to make sure you understand what is and isn’t covered. Most building insurance policies will NOT cover:

  • Wear and tear, gradual deterioration and lack of maintenance
  • Mildew and rust
  • Pre-existing damage
  • Theft or damage, such as water or wind coming through an open window as a result of your windows or doors being left open

It’s important to look for any signs of structural issues to your home and get them addressed quickly. A qualified building inspector may be best to give you advice on structural issues with your home. Depending on the severity of the problem, a building engineer may also be required to report on the cause of damage and recommend the most appropriate way to rectify any structural issues.

How much cover do I need?

Your insurance should be enough to cover the cost of replacing the building itself and all permanent fixtures and fittings inside it, including demolition, architect and builders fees. This is known as your building sum insured. It’s not the same as the market value of your home, which is how much you would sell it for on the real estate market and includes the cost of the land. Use our  building or contents calculators to work out the estimated cost of rebuilding your home.

What’s an excess?

The excess is the amount you agree to pay if you need to make a claim. Depending on your policy, you might have to pay more than one type of excess, e.g. an earthquake could result in an extra excess being payable.

What if I’m renting or I have tenants living in my property?

If you’re renting, you may want to consider Renters’ Insurance. This is generally a low cost contents policy for tenants that provides limited cover. This can also be used for owner/occupied policies who wish to have low cost limited contents cover.

If you have an investment property, Landlords’ Insurance might be an option for you. This covers the risks associated with renting out a property.

When you’re choosing the right home insurance policy, we’re here to help. To find out more, you might like to compare our home insurance or learn about contents insurance.

RAC Insurance Pty Limited issues these products. Check the PDS to see if the policy is right for you. This document is designed to provide helpful general guidance on some key issues relevant to this topic. It should not be relied on as legal advice. It does not cover everything that may be relevant to you and does not take into account your particular circumstances. You must ensure that you seek appropriate professional advice in relation to this topic as well as to the currency, accuracy and relevance of this material for you.