Home insurance may protect you financially if you suffer damage to your property or belongings. However, there’s much more to it. Find out what you can cover and what you’re covered for today. Read on for Monzi’s comprehensive guide to home insurance detailing all the information you must know to find a policy that suits you. 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 insurance?
Home insurance is a type of insurance policy that protects your home and belongings if they incur damage as a result of certain events. With this, you may avoid having to pay significant amounts out-of-pocket to replace or repair the damage. In most cases, to be covered, you’ll have to pay an insurance company a monthly or annual premium.
However, it’s important to note that your policy won’t necessarily cover you in every situation. As a result, you’ll always need to consult with your insurer or the Product Disclosure Statement to find out if you’re able to make a claim. Although, we’ll explain this further as we go.
So, now that we’ve defined home insurance, we’re able to move on. Read on as your pals at Monzi breakdown all the information that you must know to find a suitable home insurance policy. Let’s get into it.
Why do I need home insurance?
It doesn’t matter which way you look at it, home and/or contents insurance is almost always a must. After all, there’s a good chance you’ve poured a considerable amount of resources into purchasing your home and belongings. As a result, you want to know that it’s protected.
Still not convinced? Other reasons why you should take out home insurance include:
- You never know what’s around the corner: you get home insurance to protect yourself in case things go wrong. While in a perfect world, you’d never have to make a claim, you never know when a burst pipe could flood your bathroom or a freak storm could rip the roof off your home.
- Replacements and repairs are expensive: without insurance, you’re liable to pay the full costs to replace broken items or repair damage to your home. Unless you’ve got significant savings, it’s unlikely that you’ll have the cash available to do so.
- It’s usually worth it: you can’t predict the future. Home insurance is popular for a reason. While you may not like having to pay annual premiums, when something goes wrong, you’ll be glad you did.
Types of home insurance
When it comes to home insurance, it’s not as simple as one-size-fits-all. Instead, there are a few different types of insurance cover that will each be appropriate in different situations. To assist you, we’ve outlined three of the most common home insurance policies below to help you determine which one may suit your situation the best. Check it out:
Let’s start with basic building insurance. In short, this type of insurance will cover your home and most other structures on your property, in the event of damage, fire, theft or other similar events. However, any belongings or possessions within the home are not covered, meaning that you would be liable to pay the full costs for repairs or replacements.
Given this, home insurance is usually reserved for homeowners who may be renting out their property. After all, it will not be their possessions in the home. In addition to this, it may also be an option for homeowners living in their own home who may have few possessions of value.
As you may have guessed from the name, this policy will only cover your belongings or the contents of your home. In other words, if your possessions (e.g. television, jewellery, etc.) are stolen or damaged, then you may be able to submit a claim. As a result, it’s usually the best insurance option for renters, given that the homeowner must insure the house, whereas you just have to insure your possessions.
Home and contents insurance
The final type of insurance combines both of the policies outlined above. With home and contents insurance, you’re able to protect yourself from both damages to your home and other structures on the property (e.g. sheds or swimming pools) as well as your possessions. Home and contents insurance is usually reserved for individuals who own and live in their own home.
What events does home insurance cover?
The events and damage that you are covered for will vary based on your insurer and your policy. However, as a guide, standard home and contents insurance will usually protect you should the following events occur:
- Natural disasters (e.g. storms, cyclones, flooding, earthquakes)
- Escape of water (refers to leaks, pipes bursting, etc.)
- Damage resulting from impacts (e.g. tree falling on your home)
- Vandalism or other damage
- Accidental damage
However, make sure you read the fine print, so you know exactly what you are covered for. If you’re still unsure, contact your insurer to clarify. There’s nothing worse than finding out you’re not covered when it’s already too late.
What events and situations are not covered?
Just like we mentioned above, this will vary between insurers. As a result, you must always read the fine print on any policy. That is the only way that you will know for sure what is and is not covered.
In any case, as a guide, you may not be able to make a claim if:
- You caused deliberate damage.
- Illegal actions result in damage to your property.
- You did not secure your home (e.g. doors left unlocked).
- Damage resulted from wear and tear, rotting, rust, mould, mechanical failure or other similar factors.
- You did not take reasonable care of your belongings.
- You left your home unoccupied for a long period.
Note that there may be many other situations to add to the list above. Moreover, as we’ve said, insurers vary in their policies and exact criteria. As a result, while you may be covered for some events with one insurer, you may not be with another. So, take your time and read the terms and conditions before reaching any agreement.
Home insurance and your excess
If you’ve ever taken out an insurance policy before (e.g. car insurance or private health insurance, income protection, etc.), then you’re probably aware of the concept of excess. However, if you are not, then allow us to explain.
In short, most insurance policies come with an excess. It is the amount that you have to pay out of your own pocket for repairs or replacements if you make a claim on your insurance. The difference between your remaining costs and your excess are then covered by your lender.
Let’s make this more clear via an example. Let’s say your home suffered $10,000 worth of damage and your insurance excess is $1,000. With this, you must pay the $1,000 yourself, while your insurer pays the remaining $9,000. Easy, right?
The final thing to know regarding insurance excess is you can often choose the figure you want. On the one hand, a low excess means you’ll pay less if things go wrong, but your premiums will be higher. On the other hand, a high excess may reduce your premiums, but in the event of a claim, you’ll shell out more. As a result, aim to select the balance that works for you.
How much does home insurance cost?
Unfortunately, we cannot give you a definitive answer. In most cases, you must pay insurance premiums on a monthly or annual basis. However, your costs will vary based on your policy-type, your level of cover, the specifics of your home and contents and whether you take advantage of any optional features.
As you may expect, home and contents insurance will come with the highest annual costs. This makes sense, given that it combines two types of cover into one policy. However, it will often be a cheaper option than taking out a home insurance policy and a contents insurance policy separately.
If you are looking to save money on your premiums, then it pays to shop around. Compare a range of insurers to determine what a reasonable price may be. In addition to this, reducing your level of cover and increasing your excess will often result in your premiums decreasing. However, the downside of this is that you’ll pay more out of pocket if something goes wrong.
Where can I get a home insurance quote?
Most insurers and comparison sites will be able to provide you with a home insurance quote online or over the phone. As part of this, you must provide some details regarding your home and contents, so that the insurer can determine your level of cover.
With this, remember that you’ll usually be able to get a quote for free. As a result, there’s nothing stopping you from approaching multiple insurers to get a quote from each. Doing that may allow you to compare your options to find the deal that’s right for your needs and objectives.
How do I compare insurance policies?
Ultimately, picking the right policy that provides an appropriate level of cover is the goal when you’re looking for home insurance. With this, it’s always best to compare your insurance options. As a result, you may be able to find the perfect balance between cover and costs for your circumstances.
Check out Monzi’s quick list of features to compare:
- Type of cover: are you looking for home insurance, contents insurance or a combination of the two?
- Premiums: for many people, the cost is a deciding factor. Compare premiums to find out how much you’ll have to pay.
- Excess: how much will you pay out of your own pocket if you submit a claim? Insurers may reduce your premiums if you select a higher excess.
- Exclusions: read the fine print to compare what is and is not covered. Some policies may not cover you if certain events occur. So, make sure you know what’s excluded and whether or not it will be relevant to you.
- Limits: you may only be able to claim a specified amount on certain belongings.
- Liability cover: if another person is injured on your property, is that covered?
Note that there may be other factors that you must consider. This is just a brief list to give you an idea on what you should look at. For more information, check out Moneysmart’s guide to choosing the right home insurance.
Should I use a home insurance calculator?
If you have never taken out a home insurance policy or you’re unsure of what the right level of cover is for you, then an insurance calculator for your home is often a great place to start. In short, these calculators, which are similar to a loan calculator, are offered by most insurers for free through their website, so they shouldn’t be too hard to find.
When using one of these calculators, you will typically be required to provide the details of your home and contents. For instance, regarding your home, you may be asked to provide your postcode, a description of your home, the number of bedrooms and bathrooms as well as other similar features. For your contents, you may need to list your possessions and a description of their state.
From there, the calculator may determine an estimate of what your replacement costs may be. As a result, you can get a good idea of the cover that you need. However, all figures will be estimates designed to provide you with a starting point.
Finally, it’s crucial to remember that finding the right level of cover is imperative. If you are underinsured and something goes wrong, you may face significant out-of-pocket expenses to replace or repair your home and valuables.
Who offers the best home insurance?
The Australian insurance marketplace is a highly competitive industry. With new insurers popping up almost every day, we understand why you may want to know which one is the best.
Unfortunately, Monzi cannot say with certainty which company will offer the best insurance products. With this, in many cases, the best insurer will be entirely subjective. In other words, the best insurer for you may not be the best insurer for another person.
As a result, it’s up to you. Often, a useful place to start could be one of the many comparison websites that make comparing insurance a breeze. Alternatively, investigate industry awards or other such honours, to see how each company stacks up. Finally, look at the products and how they fit with your situation.
While there may not be an insurer that is definitively the best, there may be one that’s the best for you.
How can I get cheap home insurance?
Unfortunately, there is no magic answer to this question. After all, if there was, then we’d all be taking advantage of cheap home insurance policies. That said, if you are looking for a good deal to reduce your costs, then there are a few things that you can try. Check out our quick list below:
Find a multi-policy discount
Not only can you get a discount by bundling home and contents insurance, but you may also be able to access multi-policy discounts by taking out multiple policies with the same insurer. As a guide, this may include home, car, boat, travel, dental and pet insurance. Do your research to determine if this could be an option for you.
Find out if you’re eligible for a loyalty discount
If you’re a good customer who has remained loyal to one insurer for many years, then they may reward you with a discount for this. After all, the last thing they want is to lose you to the competition. Realistically, you won’t know unless you ask, so contact your insurer today. The worst they can say is no.
Compare, compare compare
We mentioned this enough already, however, it really is the best way to find cheap home insurance. If you take the time to shop around and compare products, then you may find a suitable policy for your needs and goals. In saying this, basing your decision purely on price may not always be best. Consider your level of coverage, your excess and other factors to inform your decision.
Choose a higher excess
Your final, and arguably easiest, option is to increase your excess. As we know, your excess refers to the amount you pay out of your own pocket when you make a claim. When it comes to home insurance, the higher your excess is, the lower your premiums will be and vice-versa.
While this sounds like a quick and easy fix to access cheap home insurance, think about the long-term consequences. Sure, you can save money in the short-term on your premiums. However, if disaster strikes, then you’ll be liable to pay a greater portion of the repair costs.
Given this, if you select a higher excess, then it may be worth setting up an emergency fund with the money you save. Add to it regularly, so that if things go wrong, you’ll have something to fall back on.
Is it mandatory to insure my home?
No, to an extent.
If you own a car, then you’re probably aware that it’s illegal to drive your car without Compulsory Third Party insurance. However, with homes, it’s a little different.
If you are a homeowner, then, legally, you are not required to insure it. That said, if you do not own the home outright and are instead paying it off via a variable rate mortgage, then your lender may mandate that you must insure it. This makes sense, given that the home is security on the loan. As a result, significant damage poses a great risk to your lender.
Finally, if you own your home outright, then it’s up to you whether you insure or not. However, as we’ve outlined, it’s usually a good idea.
How much is home and contents insurance on average?
Rolling your home and contents insurance into one policy will usually be cheaper than taking out each policy separately. Unfortunately, though, Monzi cannot say what the average price of this policy may be. After all, premiums can vary greatly depending on the specifics of your policy (e.g. insurance excess).
As a guide, annual costs may range from hundreds of dollars to thousands. Given this, you may need to approach an insurance company online to request a quote. By doing that, you can get an idea of how much you’ll have to pay.
Will my home insurance premiums increase if I make a claim?
Yes, they may.
When lenders calculate your premiums, one factor that they often take into account is your claims history. As a result, if you have made a number of claims recently, then your insurer may raise your premiums. The justification for this is that more claims represents more risk for the insurer. Higher premiums are, therefore, a way to compensate for this risk.
The flipside of this is that if you keep your home and contents safe and do not make a claim for several years, then you may be eligible for a reward. In some cases, insurers will offer no-claims bonuses to reduce your premiums.
Is it worth claiming on home insurance?
In short, it may be.
However, you should not necessarily submit a claim for any damage to your property or belongings. To make this more clear, you should only make a claim on your home insurance policy if the repair or replacement costs are significantly higher than your excess.
Realistically, this makes sense. As we know, your insurance excess is the amount that you pay out-of-pocket should you make a claim. Moreover, as we’ve outlined, making a claim may lead to higher premiums down the line.
As a result, if, for example, your excess is $700 and your home requires $700 worth of repairs, then submitting a claim will provide you with no benefit. Moreover, if your costs only slightly exceed your excess, then it’s usually better to just cover it yourself. However, if you don’t have the necessary cash-on-hand, then, in that case, you may need to submit a claim.
What is home warranty insurance?
Home warranty insurance is slightly different from standard home insurance. However, it’s important to understand it nonetheless. Home warranty insurance applies in situations where you are building a new home or completing renovations.
In short, home warranty insurance is taken out by a contract on your behalf and exists to protect you. In other words, if your contractor doesn’t finish the job or their work is defective, then you may be covered by insurance.
Typically, the contractor is responsible for paying the premiums directly. With this, the contractor collects the money from you, meaning it’s paid on your behalf. However, note that certain requirements and policies may vary based on the state you are living in. As a result, you must do your research to determine how it may apply to you if you’re after a construction loan or want to do some renovations.
Home and contents insurance QLD
Living in the sunny state of Queensland? Do you need home and contents insurance to protect your property and belongings? The good news is that there are plenty of options available for you. So, whether you’re up north and need to be covered in the event of a cyclone or down south and want protection from severe storms, there could be a suitable option for you. Do your research to find an insurer who can help.
Home insurance vs building insurance: what’s the difference?
In short, there is no difference. They’re simply two different ways to refer to the same product.
As we’ve already explained, building insurance covers you in the event of damage to your home. However, it also extends to other structures and buildings on your property too. As a result, you may be able to claim for damage to your garden shed, swimming pool or patio too. However, consult with your insurer to determine if this is an option.
What should I do when I renew my home insurance?
If you need to renew your home insurance, there’s no need to rush in. Instead, you should always take the time to review your current policy. In other words, look at how much you are paying as well as your level of cover. With this, you should always take into account any changes to your circumstances that may have occurred (e.g. household renovations, reduced income) since you originally agreed to the policy.
In addition to this, make sure you look into other options. While you may be content with your current policy, why not take the opportunity to see if you can get a better deal elsewhere? If you’re lucky, you may be able to increase your level of cover or decrease your costs by doing a little bit of research.
Ultimately, though, if you are happy with your current insurer and policy, then there’s no reason not to renew. However, don’t be afraid to look around for a better deal.
Does Monzi offer home insurance policies?
As we reach the end of the line, it’s important to note that Monzi is not an insurance agency. As a result, we are unable to offer the products that you may be looking for. Instead, we’ve simply tried to explain all the home insurance information you might need to know to help you find the right policy.
What Monzi may help you with, though, is personal loans. In short, we’re a lender-finder service who might make it easy for you to connect with Aussies lenders online. With this, you can apply for online cash loans from $300 to $10,000 and we’ll do our best to find an available lender who could offer the funds you need.
The lenders may offer a range of credit products with secured and unsecured loan options available too. Moreover, with repayments ranging from 12 to 24 months, they may be a manageable option if you’re dealing with a cash shortfall today.
So, if you’ve got a pressing expense but your budget’s stretched thin, then you can apply with Monzi. We’re always happy to hear from you.
Can I use a personal loan to cover my insurance excess?
In many cases, you may spend personal loans like cash. In other words, you may use them to cover a vast array of emergency or unexpected expenses. One such expense may be the excess on your car or home insurance claim.
As we’ve mentioned, with Monzi, you can potentially borrow up to $10,000 through one of our many lenders. So, if you need personal loans for insurance excess, apply today. We may match you with a lender in just 60 minutes. Pay for those repairs today!
How do I apply?
When you need fast cash loans, turn to Monzi. Our lender-finder service may take the hassle out of choosing a lender. With one application, we could match you with an Aussies credit provider in just 60 minutes. Follow these easy steps when you’re ready to begin:
- Use Monzi’s loan slider to choose your loan amount and repayment term (if applicable).
- Complete your application by providing the necessary personal and financial details.
- We take it from here and will do our best to match you with an available lender from our network. Apply during business hours and you may receive an outcome in just 60 minutes.
- Listen out for a notification on your phone as at the conclusion of our search, we’ll contact you with an outcome. If we find you a match, then your lender will contact you to begin the assessment process.
Note that Monzi cannot guarantee if you will be matched with a lender or if your application will be approved. However, we’ll always do what we can to help you access the quick loans you’re after.
Are you after a personal loan to cover the costs of your insurance excess? Maybe you need a loan to pay for some emergency car repairs? Whatever your reason, Monzi could be there to help you.
Apply now and we may pair you with a lender offering cash loans from $300 to $10,000. As a result, you may get the quick cash you need now, while spreading the costs over periods ranging from 12 to 24 months. It’s as easy and stress-free as can be.
Ready to begin? Just hit “Apply Now.”
Keen to learn more about the various insurance products on the market? Check out Monzi’s guide to life insurance today.