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Home and contents insurance explained (Australia)

A beginner's guide to home and contents insurance in Australia — the difference between building and contents cover, what each protects, how sum insured works, common exclusions, and how to choose the right level.

Home and contents insurance is one of the most important covers most Australians hold, and also one of the most misunderstood. The confusion usually starts with a simple question: are you insuring the building, the contents, or both? Get that right and the rest falls into place.

Building insurance

Building (or "home") insurance covers the physical structure of your property and the things permanently attached to it:

  • Walls, roof, floors and foundations
  • Fixed fittings like built-in wardrobes, kitchens and bathrooms
  • Permanent structures such as garages, fences and sheds
  • Fixed items like hot water systems and solar panels

It responds to insured events like fire, storm, impact and theft damage, rebuilding or repairing the structure up to your sum insured.

Contents insurance

Contents insurance covers the things you would take with you if you moved out — the belongings that are not bolted down:

  • Furniture, whitegoods and appliances
  • Electronics, TVs and computers
  • Clothing, jewellery and personal effects
  • Tools, sporting gear and hobby equipment

Some policies extend contents cover to items you take outside the home (portable contents), usually as an optional add-on.

Rule of thumb: if you turned the house upside down, building insurance covers what stays put and contents insurance covers what falls out. Owner-occupiers usually want both; renters usually want contents only.

How sum insured works

Both covers are capped at a sum insured — the maximum the insurer will pay. For building cover, this should reflect the cost to rebuild (not the market value or purchase price), including demolition, debris removal and current construction costs. For contents, it should reflect the cost to replace everything you own at today's prices. Setting either too low is under-insurance, and it is one of the most common and costly mistakes Australians make.

Common exclusions and traps

  • Wear, tear and gradual damage — insurance covers sudden events, not slow deterioration or poor maintenance.
  • Flood and certain storm events — sometimes optional or defined narrowly; check how your policy defines flood.
  • High-value items — jewellery, art and collectibles above a sub-limit usually need to be specified separately.
  • Unoccupied homes — cover can change if the property is empty for an extended period.

Choosing the right level

Start with an honest rebuild estimate and a room-by-room contents inventory. Then weigh the excess (higher excess, lower premium), optional extras like accidental damage or portable contents, and any flood cover you need for your area. Review the sum insured every year — rebuild and replacement costs move, and automatic indexation does not always keep pace with reality.

Insuro keeps your home and contents policy, sum insured and renewal date in one vault — and reminds you before it renews so you can check the cover still matches your home. Forward your insurer emails to your private@insuro.com.auaddress. Free during beta.

Frequently asked questions

What is the difference between building and contents insurance?⌄

Building insurance covers the physical structure of your home — walls, roof, fixtures and permanent fittings. Contents insurance covers the things inside it that you would take with you if you moved, like furniture, electronics and clothing. Many policies combine both.

Do renters need home insurance?⌄

Renters do not insure the building — that is the landlord's responsibility — but they should consider contents insurance to protect their own belongings against theft, fire and damage.

How much contents insurance do I need?⌄

Enough to replace everything you own at today's prices. A room-by-room inventory is the best way to estimate it. Under-estimating leaves you short at claim time; over-estimating means paying for cover you cannot use.

What is usually not covered by home insurance?⌄

Common exclusions include wear and tear, gradual damage, poor maintenance, and sometimes flood or specific storm events unless added. Certain valuables above a limit need to be specified separately. Always check the PDS for exclusions and sub-limits.

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