What home insurance covers
Home insurance can be divided into two main types:
This type of insurance covers the actual structure of the house as well as fittings in the home that cannot be moved.
Home Contents insurance
This covers the contents of your house such as furniture and possessions.
It essentially covers loss or damage caused to the home.
When should you get home insurance?
If you have a bond with the bank you will be required to insure the property. They will often try to encourage you to use one of their associated insurance companies but you are free to choose any company. This may mean that the bank will charge you administration fees.
You don’t always have to own your home to need home insurance. Many landlords require tenants to have home contents insurance.
A rule of thumb is that your first home should have buildings and contents insurance. Investment properties usually only need building insurance.
What is typically covered?
Damage to buildings and/or contents through fire, storm damage, electrical shorts fires, leaking plumbing or third party damage such as burglary.
Tell me more about home insurance costs:
How much home insurance costs, is based on a number of factors, such as:
The value of the building and contents covered
Your building will be assessed for its value and the value of your contents should be calculated at least once every six months. This will go a long way towards making sure that you are sufficiently covered.
The risk profile of the homeowner
Your age, your credit rating and job will play a big role in determining your risk profile.
The area in which the home is located
If you live in a safer area you may benefit from lower premium costs.
Level of security
If you added features such as an alarm system and burglar bars you could lower your home insurance costs.