Building Insurance – Monzi’s Guide To Insuring Your Home

Building insurance protects your most valuable asset in the event of damage resulting from insured events. With this, you must find a policy that provides an appropriate level of cover for your home. To do this, you’ll need a strong grasp of building insurance and all the key details. That’s why Monzi’s delivered our home building insurance guide. Let’s go.

Please note, certain ideas and products presented in this article may not be offered by Monzi nor the lenders we work with. This article presents only general information. Consider seeking professional financial, taxation, legal or other advice to check how the information and ideas presented on this website relate to your unique circumstances.

What is home building insurance?

Home building insurance is a policy that covers your home and most other permanent structures on your property (e.g. garages or swimming pools) if the property is damaged or destroyed by an insured event. As a result, you are covered for the costs of replacements and repairs.

Generally, home building insurance comes in two forms: sum-insured cover and total replacement cover. Moreover, you may be able to combine your home insurance and contents insurance into a single policy too.

While that provides a basic outline, for a complete explanation, you must read on as Monzi looks in-depth at what you need to know. Check out our easy guide to home building insurance today.

Who is home building insurance for?

Generally speaking, home building insurance is the most appropriate insurance option for homeowners. In particular, a home building insurance policy by itself is most suitable for homeowners renting out their property.

This is because building insurance only covers the physical structure of your home. In other words, the contents of your home aren’t insured. As a guide, this may include TVs, jewellery, furniture, white goods and other personal effects. With this, you must apply for a separate contents insurance policy.

If you are an owner-occupier, then you will typically need to take out a building insurance policy too. However, as property contains your contents, you may look at a combined home and contents insurance policy instead.

How does building insurance work?

In short, it will work in the same way as any other insurance policy. If your home or other structures on your property are damaged in certain circumstances (e.g. fire, natural disasters, etc.), then you must submit a claim. Your insurer will then process this and if approved, they will cover the costs of repairs. As a result, it provides a safety net for you, so that you don’t face significant expenses when things go wrong.

However, it’s important to note that insurance isn’t free. To be covered, you must pay your insurer an annual premium. Your insurer will determine the amount you pay based on your level of cover and other factors related to your home (e.g. location).

While paying a premium may seem like an unnecessary cost if you never make a claim, insurance is almost always a good thing to have up your sleeve. After all, if your home suffers significant damage or is destroyed completely, it may be unaffordable for you to cover the cost of repairs and replacements.

What are the two types of building insurance?

Sum-insured cover and total-replacement cover are the two types of building insurance. Given this, you’ll have to consider your situation to determine which option is most appropriate. See below for our quick outline of each type:

Sum-insured cover

This type of insurance provides you with sufficient cover to repair or rebuild your home, if it is totally destroyed. In most cases, this type of insurance will be more common than total-replacement and insurers offer it as a standard policy.

With this, it is the maximum amount that you can claim. Moreover, your level of cover will be determined by what you estimate the costs would be to rebuild your home. In the event that your home is destroyed, if your repair costs exceed your level of cover, then you must pay the rest out-of-pocket.

Finally, it’s important to note that you shouldn’t insure the property based on its current value, the value of your mortgage or the price you paid for it. Instead, it is what you estimate the rebuilding costs will be.

Total replacement cover

While only offered by some insurers on a limited basis, total replacement cover may be the answer if you’re after comprehensive protection. In short, unlike sum-insured, a total replacement policy will cover the costs of rebuilding your home to its previous standard, in the event that it is totally destroyed. In other words, your house will be rebuilt to the same condition that it was before the event occurred.

While this cover will seem much more inviting, you may find it difficult to find an insurer willing to offer these policies. Moreover, the insurance premiums will be significantly higher than on a sum-insured policy, given that the insurer is potentially paying out a greater amount.

In any case, if both options are available to you, then you must consider what you value. If you are risk-averse and can afford the higher premiums, then you may favour a total-replacement policy. On the other hand, if you’d prefer a more standard option that’s cost-effective, then you may settle for sum-insured cover. At the end of the day, it’s up to you.

Do I need building and contents insurance?

If you are an owner-occupier, then a building and contents combined policy may be the right option for you. With this, not only will the structures on your property be covered, but your personal effects will be too. This is great for peace of mind as if something goes wrong, you won’t necessarily be hit with a hefty repair bill on your home and high replacement costs on your possessions.

In addition to this, the goods news is that insurers may provide you with a slight discount on your premiums if you opt to take out a home and contents insurance policy rather than two separate policies. However, ensure you assess the value of your home as well as your possessions to determine what an appropriate level of cover may be.

Commercial building insurance

Building insurance isn’t limited to private homes. If you’re a business owner or a commercial landlord, then you may need to investigate commercial business insurance.

While it will be very similar to home building insurance, it may also differ in what’s covered and will be tailored to suit your business insurance needs. For instance, while the building and property will be insured in the event of damage or loss, any signs, glass windows or other similar items may be included under your policy too.

If this applies to you, then ensure you do your research. Find a range of policies online and compare the level of cover provided, the costs and any exclusions to determine which is best for your commercial property.

Using a building insurance calculator

To determine an accurate value of your home replacement costs, it’s often a good idea to find a building insurance calculator. The calculator will provide an estimate of how much it would cost to rebuild your home. As a result, it may provide a useful starting point as you try to determine the level of cover you need.

Operating in a similar manner to loan repayment calculators, these online tools will ask you to provide the details of your home. This may include its size, the building material, the location as well as a number of other features. The calculator will then provide an estimate based on the information you provided.

However, it’s important to note that the calculator will not accurately outline your costs. Instead, it will only provide estimates, which you may use as a guide. If you want an alternative to an online home insurance calculator, then you may request a quote from an insurer.

What does building insurance cover?

Insurance policies do vary. As a result, you must read the Product Disclosure Statement (PDS) to determine what your insurance covers as well as if there are any exclusions. After all, you don’t want to lodge a claim only to find out that you are not covered.

In any case, structures, items and fittings that building insurance may cover include:

  • Your home
  • Garages and carports
  • Garden sheds
  • Swimming pools
  • Decks, verandahs and other permanent outdoor structures.
  • Fences, retaining walls, etc.
  • Jetties or pontoons
  • Solar panels
  • Satellite dishes

However, again, this is general advice only. Your insurer may cover additional items not listed above. So, ensure you read the PDS and take note of what is covered before agreeing to an insurance policy. Moreover, note that you may be able to take advantage of optional cover to broaden your protection.

What do providers classify as an insured event?

Insurance covers you if certain events occur that cause damage to your property. As a guide, these events may include:

  • Flood
  • Fire
  • Theft or vandalism
  • Accidental damage
  • Escape of water
  • Storm damage
  • Earthquakes
  • Lightning
  • Explosions

That said, this may not be the case for all policies. Check your PDS to determine if any exclusions may be relevant to you.

How do I compare home building insurance?

If you’re a homeowner, then your house is almost certainly your most prized asset. As a result, you want to ensure it’s adequately protected. To do this, you must find the right home insurance policy.

While there may be many ways to do this, one easy is to compare your options. Just as you’d compare other products and services (e.g. credit cards or mobile phone plans), looking at a range of policies may assist you to find one that suits you. Moreover, you may even find the best price too.

In any case, key features to compare include:

  • The premiums: how much will you pay annually for your cover?
  • Which type of insurance do you need: are you going to apply for total-replacement cover or sum-insured cover? Moreover, do you need contents insurance too?
  • What’s covered: ensure you can claim damage resulting from a range of events and circumstances. Consider what may apply to your circumstances too.
  • What’s not: the exclusions may be just as important. Take the time to look at what you can’t claim.
  • Temporary accommodation: will the policy provide you with accommodation if you’re forced to relocate temporarily?
  • The excess: how much do you pay towards repairs and replacement if you make a claim?

How much does building insurance costs?

Homes come in all shapes and sizes. Big or small. Multi-story or single-story. Some have a pool and garden shed, while others don’t. We could go on, but the point is that all homes are different. As a result, your insurance premiums will be too.

Realistically, this makes sense. After all, a large home will cost significantly more to replace than a small home. Moreover, a home located in an area prone to cyclones and severe weather is more likely to need repairs than a home situated in a more tranquil environment. These factors will be reflected in your premiums.

In any case, as a guide, the annual costs for building insurance may range from as little as a few hundred dollars all the way into the thousands. Your insurer will determine the final cost based on a range of factors.

Can I get cheaper home building insurance?

The first step is to compare your options. While we’ve already discussed this at length, if you simply agree to the first policy that you find, then you don’t know what you’re potentially missing out on. By comparing, you may find the cheapest deal that provides the cover you need.

Next, determine the cover you actually need. There’s no reason to pay for additional cover that you don’t need or won’t use. However, make sure that you are not sacrificing necessary coverage just to save a few bucks.

In addition to this, ensure that you shop around for discounts and deals. Insurers want your business. They don’t want you to go to a competitor. As a result, they may offer a range of discounts on your premiums if you sign-up online. Moreover, they may offer multi-policy discounts too if you bundle multiple policies (e.g. pet insurance, health insurance and home insurance).

Finally, you may increase your excess. By doing this, you’ll pay more out-of-pocket when you make a claim, but your premiums will decrease. However, we’ll touch on this more below.

When do I pay excess on home insurance?

All insurance policies come with an excess. In short, an insurance excess is an amount that you are liable to pay when you make a claim. In other words, if your house suffers $10,000 worth of damage and your excess is $1,000, that’s the amount you pay. Your insurer then pays the remaining $9,000.

Given this, it’s important to note that you will only pay an excess when you make a claim. If you are able to avoid damage to your home and don’t require an insurance payout, then you won’t have to worry about paying any excess.

However, keep in mind that your excess will impact your premiums. A higher excess means that your insurer pays less if you make a claim. As a result, there is less risk, meaning they may reduce your premiums. The reverse will be true for a lower excess. So, aim to find a balance that works for you.

A brick home covered by building insurance

Can I change my excess?

In most cases, yes.

When you apply, most insurers will provide you with the flexibility to select an excess that suits you. With this, if you want to pay less out of pocket and can afford higher premiums, then you may select a low excess. On the other hand, if you feel that you won’t need to make any claims and want to reduce your premiums, a higher excess could be the right choice for you.

Ultimately, it comes down to what you prefer. Your level of excess comes with the trade-off that it will impact your premiums. So, take the time before applying to determine what is the most appropriate option for you.

Which is the best building insurance?

Unfortunately, you must decide which home insurance is the best. Homes come in all different forms. As a result, the right home building insurance policy for you won’t always be the best policy for another homeowner.

Given this, you’ll have to consider many of the factors that we’ve outlined so far. In other words, make sure you know whether you prefer total-replacement cover or if you’re happy to settle for sum-insured cover. Moreover, determine the excess that you need based on your risk preferences.

By putting in the time to determine what your needs, objectives and preferences are, you are then able to go out and compare options to find one that fits your profile the best. If you are unsure or not confident in your ability to do this, consider approaching an insurance broker who may help guide you through the process.

Is building insurance the same as home insurance?

Generally, yes.

Building insurance and home insurance may be used interchangeably and refer to insurance that covers your house and other structures on your property. That said, home insurance may also be used as an umbrella term which building and contents insurance will fall under.

Given this, when doing your research, take care and ensure that you are looking at policies that cover what you need. You don’t want to apply only to find out it’s not the policy that you thought.

What is landlord’s insurance?

Landlord’s insurance is an all-encompassing home insurance policy that may be an appropriate choice if you own an investment property or opt to rent out your home. With this, your policy may not only cover damage to your home caused by storms and other events but could also protect you from loss of rental income or damage to any contents you provide your tenants with.

In addition to this, landlord’s insurance may come with several optional extras that you may select to upgrade your cover. For instance, your insurance may cover you for malicious damage caused by your tenants.

In any case, for some homeowners, this insurance may be a more suitable option than standard home building insurance. Consider your situation to determine if it’s right for you.

Building insurance Victoria

Are you living in beautiful Melbourne? Maybe you’re loving life on the Mornington Peninsula? Wherever you are, there will be a building insurance option for you. After all, insurance isn’t restricted by where you live. Depending on your provider, you may be able to apply Australia-wide.

That said, this is a great time to point out that your insurance premiums may vary based on your location. For instance, similar homes where one is in the city and the other’s in the country may come with different premiums. Insurers based this on factors such as the likelihood of severe weather, the crime rate and other statistical forecasts.

So, if you’re a Victorian resident and need to protect your home, compare your home insurance options to determine what’s available and what you may have to pay.

Do I need insurance when I build a house?

Yes.

If you have taken out a construction loan and are heading towards building your first home, then you must have building indemnity insurance. In short, it’s a legal requirement. However, you won’t be the one to take it out. Instead, it’s taken out by your builder to protect you if work is not completed or is not up to standard.

In addition to this, it’s important to note that policies vary from state-to-state in terms of the minimum costs before indemnity insurance is a legal requirement. Moreover, keep in mind that it may also be referred to in different ways. For instance, in Queensland, it may be called Home Warranty Insurance. Given this, do your research to determine what applies to your home building project.

Is building insurance necessary?

After all we’ve spoken about, you may still be wondering whether insurance is even necessary. With this, the answer is usually yes. Nobody can predict the future and unless you’ve got significant savings, paying out-of-pocket to repair or rebuild your home if it is destroyed likely won’t be possible.

As a result, building insurance is often a good safety net. While in a best case scenario, you may never make a claim, you never know what’s around the corner. In other words, it’s usually better to be prepared.

Finally, It’s important to note that, unlike car insurance, building insurance is not a legal requirement if you own your home outright. However, if you own your house but are repaying an outstanding home loan, then your lender may require you to have home insurance. After all, the home is the security on the loan, so if anything were to happen, the lender might face significant losses.

Can I get building insurance with Monzi?

No.

At Monzi, we don’t offer building insurance. In fact, we don’t offer pet insurance, car insurance or any other type of insurance either. We’re only here to provide general guidance and to outline the key terms you must know. In other words, this guide provides a starting point. When you are ready to apply, you can go and research different insurers and policies to find one that suits you.

What Monzi can offer, though, is one of Australia’s best lender-finder services. In short, if you need instant cash loans online from $300 to $10,000, apply with Monzi. With easy applications and fast outcomes, we may take the hassle out of finding a lender. Get a loan today to pay a bill that’s due or to cover your travel expenses. Let’s go.

Why might I need to apply for a personal loan?

Let’s say you’re in a bind. A storm damaged your home, but the repairs are only minor and don’t exceed your insurance excess. As a result, submitting an insurance claim will do no good. However, you don’t have the cash-on-hand to pay for the repairs.

In these situations, you may apply for a personal loan. In short, you can access the cash you need now from $300 to $10,000. From there, your lender will divide your costs into a series of manageable repayments over a fixed period ranging from 12 to 24 months. As a result, you can get your home repaired today.

However, note that lenders charge interest and fees on all loans. As a result, you will repay more than you borrow. So, keep this in mind before applying and ensure you consider any costs.

Can I get a loan for projects around my home?

Yes.

While insurance won’t pay for renovations, you may apply for a renovation loan from $300 to $10,000 with Monzi today. If we successfully pair you with a lender and your application is approved, then you may receive your loan on the same day. From there, you can head out and buy the supplies you need.

So, whether you’re looking to build a new garden or retaining wall, one way to make it happen could be to apply with Monzi. With one quick and easy loan application, we could set you on the path to find a great lender.

Apply today.

Am I eligible to apply?

If you like the sound of Monzi and what we can do for you, then we’re glad to hear that. However, before applying, you must confirm your eligibility. To do this, ensure you check these four boxes:

  • 18 years of age or older.
  • Australian citizen or permanent resident.
  • Have an active email address and mobile number.
  • Can provide details of an online bank account, where your income is deposited, with at least three months of history.

How do I apply with Monzi?

When you need quick cash loans to cover your insurance excess or termite damage, you can turn to Monzi. All it takes is one application. From there, we could pair you with a lender in just 60 minutes.

Ready to apply? Here’s how:

  1. Select a loan amount and repayment term.
  2. Complete Monzi’s online application. Note that you may need to provide a number of personal and financial details.
  3. Once we receive your application, our automated system will attempt to match you with a lender from our network.
  4. We’ll contact you with an outcome. If we find a lender for you, then we will pass your application over and they will contact you to begin the next stage.

Finally, keep in mind that approval is not certain. Your lender will assess your application to determine if you should be offered a loan today.

Who can I ask for help with building insurance?

While we’ve done our best to break-down building insurance in a straightforward and accessible manner, if you would like to know more, then that’s OK. You can check out Moneysmart’s guide to choosing home insurance today. It may provide answers to any remaining questions that you have.

On the other hand, if you are ready to apply for an insurance policy but are unsure which one is best, then you may contact an insurance broker. In short, they will work on your behalf to determine which policy may be most suitable, based on your needs, objectives and financial situation. Moreover, they may guide you through the application process too.

Finally, if you have any questions about Monzi or our expertise as a lender-finder service, then feel free to get in touch. While we can’t answer questions regarding building insurance, email us at hello@monzi.com.au and we’ll do our best to get back to you ASAP.

Home building insurance: Monzi’s guide

We hope that Monzi’s guide to building insurance has helped to provide a starting point for you. We’ve addressed many of the key points you may need to consider. Unfortunately, though, we are unable to provide specific insurance advice for you. As a result, you must go and apply what you’ve learned to find an insurance policy suited to your situation.

So, if you’ve dealt with your home insurance situation, but need a fast cash loan today, then Monzi may help. Apply from $300 to $10,000 now with our lender-finder service. We may match you with a great lender today. Moreover, you may repay the money you borrow over terms ranging from 12 to 24 months. As a result, a cash loan may be an option if you’ve got an expense to pay today.

Hit the “Apply Now” button or scroll up and use Monzi’s loan slider to get started.

Want to stay across all the latest from Monzi. You can follow us on Facebook, Instagram, Twitter and Pinterest.

Finally, if you’re after more from Monzi, read our quick and easy guide to life insurance or income protection insurance today.

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Costs

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You won't use a penny to apply for our lender-finding service, but here's some costs you could expect from a lender

Loan amount

$300 - $2,000

Terms

12 months

Costs

20% upfront establishment fee

+ 4% monthly fee

Example

Loan Amount of $1,000 over 6 months repayable weekly (25 weekly repayments). $1,000 (Principal Amount) + $200 (20% Establishment Fee) + $240 (fees based on 4% per month over 25 weeks) = $1,440 total repayable in 25 weekly installments of $57.60.

Under the current legislation, most small personal loan providers don’t charge an annual interest rate (you’ll know this as an APR) %. The maximum you will be charged is a flat 20% Establishment Fee and a flat 4% Monthly Fee. This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate

Loan amount

$2,001 - $4,600

Terms

13 months

24 months

Costs

48% annual percantage rate

67.41% comparison rate p.a.

Example

Loan Amount of $3,000 over 18 months repayable weekly (78 weekly repayments). $3,000 (Principal Amount) + $400 (Establishment Fee) + $1,379.06 (reducing interest) = $4,779.06 total repayable over 18 months with weekly installments of $61.27.

The Interest Rate for Secured Medium Loans is 48%. The Typical Comparison Rate is 67.41% p.a. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan. Click here to see a worked example.

Loan amount

$5,000 - $10,000

Terms

13 months

24 months

Costs

21.24% annual percantage rate

48% comparison rate p.a.

Example

Loan Amount of $10,000 over 24 months repayable weekly (104 weekly repayments). $10,000 (Principal Amount) + $5,577.12 (Interest) = $15,577.12 total repayable over 24 months with weekly installments of $149.78.

The Interest Rate for Secured Large Amount Loans is 48%. Maximum Comparison Rate is 48% p.a. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan. Click here to see a worked example.