No one wants to be the Eeyore that focuses on those unfortunate events that could happen to your brand new home. But if you’ve bought a home in Sydney, here’s a hard truth to swallow: you can’t keep pretending your home exists in a magical, protected pocket of Sydney like the Starks did. And you saw what happened to their home, Captain YOLO.
I kid, I kid. But in all honesty, protecting your home against the worst is a really good idea. It’s a smart idea. And you’re smart.
So let’s talk about home and contents insurance.
The scenario:
You’ve just bought a home, and you’ve put down a tidy sum for stamp duty, council rates, not to mention that trip to Domaine on the weekend.
But have you ever stopped to think what would happen should you need to recover the cost of your damaged assets? Could you afford to replace everything, from scratch?
Why do you need home and contents insurance?
Home and contents insurance protects your property, and all of the liquid assets inside of it: your TV, your furniture, your jewellery, your clothing, and even your knives and forks. The type of home and contents insurance you’ll need depends the value of your assets, and different types of insurance will cover you for different kinds of events. From loss due to burglary and fire to damage caused by accidental events, home and contents insurance provides a safety cushion for you to fall back on should bad luck strike.
Insurance policies can cover the market value of your assets, or they can cover ‘new for old’ replacement of your belongings. How much premium you’ll pay depends on how much your belongings are worth, and new for old policies also tend to be more expensive in general.
How to choose your home and contents insurance
Here’s how to shop online and compare home and contents insurance properly. Follow these tips, and you’ll not only have peace of mind, but a watertight insurance policy too.
To work out how much cover you need, walk through every room in your house and make a list of every single item you own and what it would cost to replace it. If you don’t have receipts, take photos of every item you intend to list on your policy. Don’t forget to include the true cost of your most precious articles, like heirlooms.
Cheap is cheap for a reason
As with all things in life, it pays when you don’t shop around on price alone. Why? Because you get what you pay for. Skimp on something important like home and contents insurance, and you’ll pay further down the track. And not just financially, but emotionally too.
Oftentimes, when a service is cheap as chips, it’s for a reason. Their customer service might be terrible, they might have more hoops than you can count to jump through, and worst of all, might not actually cover you for much at all.
Let’s take a look at two unnamed but real insurers side-by-side.
The example provides home and contents insurance for an owner-occupied, free standing 2-bedroom home in Sutherland Shire.
| Insurer 1 | Insurer 2 | |
| Sum insured for building | $318, 870 | $318, 870 |
| Contents insured | $100, 000
|
$100, 000
|
| Accidents covered | Fire, explosion, theft, vandalism | Fire, explosion, theft, vandalism |
| Accidental damage | No | Yes |
| Annual Payment | $1330.44 | $998.89 |
As you can see, a lot of the features of each product are the same.
So why the huge difference in price?
Well, Insurer number 1 has one major difference – they’ll insure Captain YOLO who doesn’t have much home security, but at a cost. This means that if your home doesn’t have an alarm or lockable windows, you can still get cover. But because you’re high risk, they’ll charge you more. Insurer 2 will only cover those who take extra precautions, so their premium is a bit more competitive.
My recommendation? It’s better to be safe than sorry. Secure your home, and you’ll save in the long run.
Consider the underdog
When you’re comparing home and contents insurance online, you’ll likely find that the big guys are at the top of the search engine results. And if you look at the Canstar website, you’ll see they consistently award the big guys, too. But there are a whole bunch of other insurers that you might not be considering, simply because you don’t know where to find them.
When comparing home and contents insurance online, it doesn’t come down to which company got the best review, it comes down to what’s the best value for YOU. A smaller insurance firm could be more affordable, and because they’re much smaller, there’s far less bureaucracy for you to deal with. On top of that, they’ll often be underwritten by a major insurer, so you get all the pros of top dog insurance, and all the pros of dealing with a personable, boutique insurance firm.
Bundle all of your insurance policies
Like when you bundle your phone and internet bill, or your electricity and gas bill, when you hold all of your insurance policies under the one provider, you’ll often get a discount. Do some number crunching to make sure the discount is actually worth it, and be sure to check the cooling off period for any last minute change of mind.
Home and contents insurance is essential if you’ve just bought a property of your own. And most importantly, having the right kind of home and contents insurance is imperative. Always, always make sure that you’re not underinsured, lest you end up paying through the nose to cover any extra costs.
Do yourself a favour and compare home and contents insurance online well before you buy a home in Sydney. You won’t regret it!