6 tips to help you get more value from your home insurance

11-minute read

Top tips

• Choose the right cover
• Review and update your policy details
• Check your sum insured
• Tailor your premium with the choice of excess
• Ask about building and contents insurance discounts
• Consider monthly payments
• Case study: How James and Stacey saved on home and contents insurance

 

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:

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 Your insurance provider relies on the information you supply, and having incorrect or out-of-date information on your policy could mean you're not sufficiently covered when you need to make a home insurance claim.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.

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.
 

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.