If you’re living in your own home, whether rented or owned, it might be wise to take out some form of home and contents insurance. This article will help answer your questions as to what home and contents insurance is, the different types you can choose between, and what exactly it covers.
What is Home and Contents Insurance?
Well, for a start, it’s comprised of two types of insurance.
The ‘home’ part, covers the actual physical structures.
The ‘contents’ refers to your personal belongings, furnishings or appliances, which are kept within that property.
These policies can be taken out separately or together.
For example, if you’re living in a rented apartment, you might want to cover your contents against burglary or damage. However, the landlord is the one responsible for insuring the apartment itself.
Or, you may own an unfurnished rental property. In which case, you may need the property insured but, if you have no belongings in there, you don’t need to pay for contents insurance.
Let’s have a look at the different types of home and contents insurance available.
Types of Home Insurance
As outlined above, home and contents insurance can be taken out separately or together. Home insurance is sometimes called ‘building insurance’, like we do at Bank First.
There are also policies specifically tailored to the needs of a landlord (landlord insurance), which may take into account the added risks associated with damage caused by tenants.
Most of these policies will cover the structures which form your home, including garages. It also covers anything that’s permanently fixed to your home, like built-in cabinetry, wardrobes, plus electrical fittings and the like.
Some home insurance policies will cover you for the total replacement value of your home. That is, what it would cost to rebuild/repair your home to its current standard at today’s prices.
Most policies cover you for ‘sum insured’, that is to say, they will only pay out to the amount you nominated when taking out the insurance. So, it’s very important to keep your insured amount updated, as house and building costs rise each year.
Types of Contents Insurance
Contents insurance covers your belongings such as furniture, jewellery and money.
There are types of property insurance for renters, and some will cover people living in shared accommodation. It’s always wise to check the details of what’s covered before you take out a policy.
The big choice you have, is do you take a ‘new for old’ policy or a ‘replacement value’ policy?
A ‘new for old’ policy will pay the full replacement value of anything which is stolen or damaged, at today’s prices.
A ‘replacement value’ policy only covers you for the depreciated value of your possessions.
So, if the TV you purchased in 2012 was stolen, you’d only get back what it’s worth today.
Overall, you’ll pay more for a ‘new for old’ policy, but it could seem like good value if you ever need to claim.
What Does Home and Contents Insurance Cover?
Each policy varies. But in general home insurance covers your property for the costs of rebuilding or repair, should it become damaged because of things like flood, fire, explosion or burglary.
You can also add Accidental Damage and other specific events to your policy. Bank First, through CGU, gives you the option of 3 different levels of cover depending on your needs.
In addition, our Building Insurance covers your domestic outbuildings such as garages and sheds, as well as in-ground swimming pools and spas.
The important thing is to pay attention to what you want covered and to check if your policy is adequate for your needs, should you need to claim.
In comparison, contents insurance covers a wide range of your personal possessions. For instance, our offering through CGU covers money, jewellery, computers and software, as well as furniture, garden tools and more. Not all insurers cover everything, so it’s important to do your own research before you sign up.
Once you’ve chosen an insurance provider, your contents will be insured if they are stolen or damaged by things like fire, flood or even an explosion. As mentioned above, you can also add accidental damage to your policy with some insurers. It’s important to check that any high value goods are fully covered, especially if you take them out of the house, or overseas.
Review the amount you’re insured for regularly. If you’re underinsured, you could end up out of pocket in the event of a claim.
How Do I Claim?
If you need to claim, start by taking full details of the event that caused the claim. It’s a good idea to take photographs of any relevant details, this will help explain the situation to the insurer. If you’re with an insurer like CGU through Bank First, you’ll have 24/7 access to claims services, and it’s always a good idea to get your claim in quickly.
Where Do I Start?
Well, you’re in a good place. Bank First can help answer all of your questions about home and contents insurance.
We’ve partnered with CGU, one of Australia’s leading insurers, to offer you market-leading insurance. You can check out our policies here.
We’ve made getting an obligation-free quote, simple. Plus, you can call our friendly Insurance Consultants to help you get the right cover on 1300 654 166. So, if you decide to take out a policy, they’ll make the process seamless.
Standard underwriting criteria and policy terms and conditions apply. Insurance issued by Insurance Australia Limited ABN 11 000 016 722, AFSL 227681 trading as CGU Insurance (CGU). In arranging this insurance, Victoria Teachers Limited ABN 44 087 651 769 AFSL 240960 trading as Bank First (Bank First), acts under its own AFSL and under an agreement with CGU, not as your agent. Bank First receives commission when selling CGU insurance products. Please refer to Bank First’s Financial Services Guide (FSG) for details of these commissions. Any advice is general only. This information does not take into consideration your objectives, financial situation or needs. Therefore, you should firstly consider the appropriateness of this information and refer to the relevant Product Disclosure Statement (PDS).
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