Home and Contents Insurance in Australia

Home and contents insurance in Australia has a few genuinely different concepts from what you might expect, especially around how the building itself gets covered and what a body corporate does and doesn't insure.

Sum insured vs total replacement

Australian home insurers generally offer two different models. Sum-insured cover — the more common of the two — pays out up to a set amount you nominate, based on what it would cost to rebuild. Total replacement cover instead promises to rebuild your home to its previous standard regardless of the final cost, with no fixed cap. Total replacement sounds safer, but it's not offered by every insurer or for every property type, and it usually costs more — worth asking directly which model you're being sold, since the two behave very differently after a genuine total loss.

If you own an apartment or unit: strata doesn't cover your stuff

If you're in a strata scheme, your body corporate already insures the building itself through strata insurance — but that cover stops at the building's fixtures. It specifically excludes things like carpets, curtains, blinds, and any appliances not actually wired into the property. Your own belongings, and often internal fixtures you've added yourself, need to be covered by your own contents insurance — this is a genuinely common point of confusion for first-time apartment owners, since it's easy to assume the body corporate's premium already covers everything inside your own walls.

Sum insured, not automatic replacement, for contents

Contents insurance is a separate decision from your sum-insured figure for the building: new-for-old cover replaces items regardless of age or wear, while indemnity cover only pays what the item was worth at the time, after depreciation. Confirm which you're being sold, since the difference matters a lot at claim time.

Flood and bushfire risk affects pricing directly

Unlike some countries where natural disaster cover is a flat, government-backed scheme, Australian home insurance premiums are priced individually against your property's actual bushfire and flood risk — a real and sometimes significant factor in areas with known exposure. If you're moving to a bushfire-prone or flood-prone area, get a quote before you commit to the property, not after, since premiums (and in some cases availability of cover at all) can vary a lot by address.

Evidence that actually helps a claim

Photos and a basic inventory, taken before anything goes wrong, are what actually speeds up a claim — not just a rough idea of what you own. Photograph higher-value items individually, keep purchase receipts where you have them, and take dated photos of the property's condition when you move in.

Before you move in

1. Confirm your new cover starts on settlement or move-in day, not whenever you get around to calling.
2. Set your sum insured based on rebuild cost, not purchase price — these can be very different figures, especially in a fast-moving property market.
3. If you're buying into a strata scheme, check exactly what the body corporate's insurance covers before assuming your contents policy needs are lighter than they are.
4. Get a bushfire/flood risk quote before committing to a property in an area with known exposure, not after settlement.
5. Compare more than one insurer — a service like Compare the Market can show you a range of options side by side, though it's worth knowing comparison sites don't always include every major insurer in the market.

Common mistakes

• Assuming strata insurance covers your own belongings — it doesn't, ever.
• Under-insuring the building using purchase price instead of rebuild cost.
• Not checking bushfire/flood risk pricing before settling on a property in an exposed area.

This guide is general information, not advice on your specific situation — an insurance adviser or your insurer directly can confirm what's right for your circumstances.