As the name suggests, Home and Contents Insurance is a category of insurance that provides various levels of cover for your home (the physical building) and the contents of your home (furniture, fittings, electrical goods etc).
As with any type of Home insurance, it is important that you understand what is covered and what is excluded under a particular policy. Insurance companies in Australia normally offer two or three levels of cover from ‘basic’ through to ‘premium’. In addition, they will normally have an option to include specific personal valuables such as jewellery, up to a nominated dollar value.
Examples of what you can expect to be covered include:
- Fire, storm, burglary
- Fire, storm, burglary, accidental glass breakage (windows that is, not drinking glasses), cash (up to a nominated dollar value)
- Fire, storm, burglary, accidental glass breakage, cash (up to a nominated value), the accidental loss or damage of other goods (up to a nominated dollar value)
So, as an example, if your house is damaged by fire, the physical building will be covered as will the various contents of the building under each of these levels of cover. However if you have basic cover and accidentally break a window, you will not be able to claim the cost of repairing or replacing the window.
Aside from picking the right level of cover, it is absolutely crucial that you place the correct dollar value on your building and its contents. If your house burns down you will only get the dollar value of the cover, even if this is not enough to rebuild. Most insurers have calculators on their websites that will help you ascertain the dollar value you need. If in doubt call an insurer and talk it through, and then opt for the higher amount. A small saving in the premium could turn into a massive loss if you need to use the insurance.
Finally, make sure you know what is excluded. If you live in an area prone to flooding, bushfires or earthquakes you may find that these events are excluded from your cover unless specifically noted.
Take the time to read the Product Disclosure Statement (PDS) of insurer policies you are considering. Even start a spreadsheet that list’s what’s covered and what’s excluded under different policies to help with your decision making.
Note: This information is general and provided as a guide only. It is recommended that you discuss your specific circumstances with an appropriate advisor.