3 tips for finding the right home and contents insurance

Date Monday, 22 June 2015 12:00 AM

To protect your beautiful new home, you'll want to make sure you have the right insurance policy should anything unexpected occur.

This is particularly important here in Australia due to moody Mother Nature. While much of the country is blessed with year-round sunshine and unique landscapes, these idyllic traits also make it susceptible to fires, floods, earthquakes and other natural phenomenon.

The ideal way to protect your new home is to invest in home insurance. Follow these three tips to make sure you're getting the best possible cover for your property.

1. Understand the different types of home insurance

Firstly, it's absolutely essential that you have a thorough understanding of the clauses set out in the insurance policy. It might take some to read all the fine print, but reading all the fine print is imperative to protecting your asset. If you're in any doubt whatsoever, seek professional advice.

Typically, there are two main types of cover you're likely to encounter: sum-insured and total replacement. 

Sum-insured cover is the most common form of home insurance and will compensate you up to a certain threshold. Total replacement cover is more comprehensive and provides funds for all the necessary costs to restore your home to its original condition.

As you might have guessed, prices can vary quite significantly between the two, so think carefully about your needs before signing anything.

If a natural disaster were to strike, could you afford to rebuild your home?If a natural disaster were to strike, could you afford to rebuild your home?

2. Compare providers

Competition is fierce in the insurance industry. Use this to your advantage to get the best rates possible. Get quotes for your house and land package from at least three different insurers or use one of the many comparison tools available on the web. Once you've established who's got the best deal, call their competitor to see if they'll beat the price. 

Depending on where you stand on the budget and risk scale, you can also try varying your excess to see how it changes your premium. Small increases to your excess can greatly reduce your monthly payments.

Protect your new home by investing in quality home and contents insurance.Protect your new home by investing in quality home and contents insurance.

3. Get sufficient contents insurance

Many insurance companies combine home and contents into one package - which will usually be cheaper than buying individually - though some providers offer them separately.

When shopping around for a policy, you'll probably run into two types of contents insurance: Those that replace your possessions with new ones and those that compensate you for the value of your items. The former are typically more expensive but can be more useful in some situations.

Whichever type of cover you choose, you'll want to have an accurate estimation of the value of your home's contents. Go through every room in the house and jot down how much it would cost to replace every single item. You'll use this figure to help you choose the right type of policy. Bear in mind that there's typically a set limit on valuable items (for example, $1,000 on general goods and up up to $5,000 total for jewellery).

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