6 tips to help you get more value from your home insurance
When you're trying to save money, it can be tempting to focus on finding cheaper home insurance premiums. But, when it comes to your home and personal belongings, being adequately covered is also important as it may save you more money in the long run. In this article, we share six practical tips to help you get more value from your home insurance.
11-minute read
Top tips
1. Choose the right cover
You'll need to have a basic understanding of home insurance before you can choose home insurance cover that's suited to your personal circumstances. Many companies aren’t authorised to give personal advice on insurance so it will be up to you to do your own research.
Types of cover available
Home Insurance is a term that can refer to different types of insurance cover. There are two main types of home insurance cover:
- Building insurance – this insures the physical structures and fixtures of your buildings,
- Contents insurance – this insures your personal possessions at the insured address.
A common type of insurance policy is Home and Contents Insurance. This includes home building insurance and home contents insurance in the one insurance policy.
If you own a rental property, Landlord Insurance can also include building and contents insurance. If you're renting, it’s still important to insure your belongings. Check whether your insurer offers renters insurance or if you can insure your belongings under a contents insurance policy.
Legal liability cover
Included in most building and contents insurance policies, legal liability cover may help pay for associated legal costs if you are found to have legal liability following an accident. This may be included as a part of building or contents insurance or as an optional cover.
In addition to this cover, home insurance providers often offer a range of optional covers that can be added to home insurance or landlord insurance.
Optional cover
Optional cover gives you additional protection and flexibility by allowing you to customise your insurance policy to match your specific needs, for an additional cost. Types of optional cover can include:
Portable contents cover
This insures items that can be taken outside of the home like glasses, jewellery or a musical instrument. Some items may be automatically included in this type of cover, or your insurance provider may need you to specify certain items, like mobile phones and laptops, on your policy in order for them to be covered.
Accidental damage cover
Accidental damage cover helps cover you in the event of accidental unexpected mishaps, giving you greater coverage for your building insurance and/or contents insurance. The exact cover and terms can vary depending on the policy and provider so it's important to understand the specific incident or situations that are covered within any insurance policy.
Motor burnout cover
This type of cover provides insurance for household appliances like fridges, freezers or washing machines and electrical motors to cover you for damage caused by electrical currents. Without this type of cover you would be responsible for the repair or replacement of these household items.
Your Policy Schedule and Product Disclosure Statement will include the full details of any optional cover you may hold. As your situation changes, take the time to review these optional covers on your Policy Schedule. You may find that some of them are no longer relevant, while you may consider others to be essential.
Insured events
Every home and contents insurance policy will include a list of insured events. These are the events the insurance company will provide cover for and may include things like fire, storms, theft or burglary and vandalism and malicious damage. You should consider whether the list of events included in your cover is right for you. For example, you may be able to manage your home insurance costs by tailoring a policy to suit your needs.
2. Regularly review and update your policy details
We know it can be tempting to set and forget your home insurance policy. But your home and contents insurance policy acts as your home's safety net so it’s important to check it’s accurate and up to date. Your insurance provider relies on the information you supply, and having incorrect or out-of-date information on your policy could mean you're not sufficiently covered when you need to make a home insurance claim.
You should review your policy regularly to make sure that the information is still correct.
Check your policy schedule
Certain features like construction materials, your home’s condition and security devices used on your property, may be listed on your home insurance policy schedule. It’s important this information is correct and it should be updated if it has changed.
If you’ve recently added valuable assets to, or removed them from, your home (like expensive artwork or jewellery) it’s also wise to consider updating your contents insurance cover.
Update replacement cost of your home and belongings
The cost of rebuilding your home or replacing belongings can change over time. It's important that your building or contents sum insured would be able to provide enough cover for your home or belongings to be replaced should you need to make an insurance claim. You can learn more about how to estimate replacement costs in Tip 3.
Record changes in your living situation
You may need to notify your insurance provider about changes to your living situation. For example, your cover may be impacted if your home will be unoccupied for an extended period or if you start building or renovation works.
Keeping your policy up to date will help ensure that you’re adequately covered and aren’t met by any surprises if you have to make a claim.
3. Check your sum insured
Put simply, the sum insured is the amount you want your home and contents to be covered for and it’s one of the most important aspects of home insurance. In recent years, the cost of building and buying household items has increased. It's a good idea to check your sum insured will cover the cost of rebuilding your home and replacing your contents in today's dollars.
According to 2019 data from the Insurance Council of Australia, 4 in 5 Aussie homeowners and renters could be underinsured, which could leave them without enough money for the repair or replacement items if the worst happened.
It can be hard to accurately calculate how much cover you need. If your sum insured is too low, you may be left without enough money to repair or replace your buildings and possessions. If your sum insured costs are too high, you may pay for home and contents insurance cover that exceeds what you’ll be entitled to claim.
Home insurance calculators
Your home insurance provider may provide access to home insurance calculators which you can use to calculate your sum insured. These tools take into account factors like construction costs, location and the value of your possessions. By verifying your sum insured, you can avoid over or underinsuring, ultimately impacting your home insurance premiums.
4. Tailor your premiums with the choice of excess
Almost all home insurance policies include an excess. This is an agreed amount you pay your insurer if you make a claim. Most insurance companies allow you to pay a higher excess in return for lower premiums, but this is not always the case. It’s important to note that even if your insurer allows you to choose a higher excess, doing so may not always reduce the premium you pay.
While opting for a higher basic excess could reduce your home insurance premium, if you'd prefer lower out-of-pocket expenses when making a claim selecting a lower basic excess may help. This flexibility could help you get the cover you need with a premium you can afford.
Just remember, if you choose a higher excess, which may result in lower premiums, you’ll need to make sure you’re able to pay for the excess if you need to make a claim.
5. Ask about home and contents insurance discounts
Home and contents insurance companies may offer discounts. Understanding the types of discounts available, and how they are applied, may lower the cost of your home insurance premium.
No Claim Bonus discount
A No Claim Bonus is a discount that some insurers give to customers who have a good claims history. Home insurance customers may be asked about their claims history while getting a quote online, in person or over the phone. If you haven't had a past claim, you may benefit from a discount on your premium.
Multi-policy discount
Multi-policy discounts are discounts given by some insurance providers to home insurance customers for holding more than one policy. Bundling multiple insurance policies together (like building insurance and contents insurance to create home and contents insurance) could consolidate your insurance into a single policy while also providing savings.
6. Consider monthly payments
Traditionally, home insurance was paid annually. However, some insurers now offer the option to pay by the month, and some even offer this at no extra cost. This monthly payment option may help you manage your finances more effectively by spreading the cost of home insurance out over the year. It can be especially helpful if you prefer making smaller, regular payments rather than making one large lump sum payment once a year. The important thing to remember is that as long as you pay on time and remain financial, protection will continue.
Case study: How James and Stacey saved on home and contents insurance
James and Stacey recently welcomed a new baby and have just purchased their second home in the coastal suburb of Davistown, New South Wales. They used all of their savings on the purchase so want to strike a balance between price and the right level of cover when insuring their home and personal possessions.
Cover for the things you need
Davistown is on the water and is low-lying which made finding an insurance provider that had storm damage and flood cover important.
Having a new baby also meant James and Stacey also wanted the reassurance of knowing they would have a place to stay if their home was damaged, so wanted an insurer who offered temporary accommodation if the worst happened.
James and Stacey knew insurance premiums can vary significantly from one insurer to another, so they decided to compare home insurance quotes from multiple providers.
Quote online, any time
James runs his own business so doesn’t have a lot of free time during the day. He visited the websites of three home and contents insurance companies after hours and used their calculators to work out their home and contents sum insured amounts. He then used personal information including their home address (also known as the insured address) to get online quotes.
It pays to compare home insurance
After completing the quotes James and Stacey compared policy details. They realised the cheapest home insurance policy would cost them less in premiums but could ultimately cost them more because floods were not included as an insured event.
After comparing home insurance coverage levels and the excess offered by the remaining two insurers they also realised one of the premiums came with a higher base excess which meant they would have to cover this additional cost if they made a claim. The insurance provider they chose also offered them the option to pay by the month at no extra cost, which helped take the pressure off their cash flow.
Are you getting the most value out of your home insurance policy?
Find out if Westpac Home Insurance provided by Allianz, could be a good choice for your circumstances.
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Things you should know
This information is general in nature and has been prepared without taking your objectives, needs and overall financial situation into account. The information is not advice, recommendation or opinion on any products or services provided by Westpac or third parties. For this reason, you should consider the appropriateness for the information to your own circumstances and, if necessary, seek appropriate professional advice. For more information on any specific products or services distributed or provided by Westpac, you may wish to read the relevant Product Disclosure Statement. To see some of the events covered and not covered, please refer to our Key Fact Sheets (KFS).
Home and Contents Insurance is issued by Allianz Australia Insurance Limited ABN 15 000 122 850 AFSL 234708 (Allianz). Westpac Banking Corporation ABN 33 007 457 141 AFSL 233714 (the Bank) arranges the initial issue of the insurance under a distribution agreement with Allianz, but does not guarantee the insurance. This information does not take into account your personal circumstances. Before making a decision, please consider the relevant Product Disclosure Statement. For more information call 1300 650 255.
If you take out Home and Contents or Landlord Insurance with Allianz the Bank will receive a commission of up to 12% of the premium, excluding Government fees and charges, plus GST.
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