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Hunting for your new home or an investment property can be a bit of a journey. So once you’ve found it, you may want to protect it. That’s where what’s called either building or home insurance comes in. Just as contents insurance helps to cover the cost of repairing or replacing your contents, home insurance helps to cover the cost of repairing or rebuilding your home against the unexpected. In fact, having adequate building insurance is a condition of most home loan agreements.
Check to see if home insurance is compulsory
No matter what type of property you’re buying, having home insurance will usually be a condition for your home loan approval and often you’ll need to provide proof that you have cover before settlement.
What’s required also depends on the type of property you’re buying.
- If you’re buying a non-strata property, like a house, your home loan provider will normally require you to have home insurance in place effective from your home loan settlement date.
- If you’re buying a strata-title property, like an apartment, typically you won’t need to get home insurance as it’s usually covered by residential strata insurance that’s included in your strata levies. Because you’ll still need to provide proof of cover to your lender before you can settle your home loan, you should contact the strata manager for a copy. However, if you’re an owner occupier, you might want to consider contents insurance as well.
Two types of home insurance cover
Home insurance exists to help protect you against things like fire, storm, rain water damage, and impact at the home. You can extend your cover further with optional benefits like accidental damage to your home, floods etc. You can usually choose from two types of cover:
- Total replacement cover. This includes all the costs to rebuild your home and restore it to the state it was in before it was damaged.
- Sum insured cover. This will cover damage up to a fixed amount.
Working out what to insure your home for
The first thing to remember is that the price you paid for your home and the cost to rebuild aren’t the same thing. In most cases, the main value of a property is in the land while home insurance is there to cover the cost of materials and labour to repair or rebuild the structure on the land.
Underinsurance is also an issue in many parts of Australia. It’s important to get an accurate estimate for your insurance to ensure your home is properly covered.
If you are unsure about how much to insure for, insurance providers normally have replacement cost calculator tools available that can be used for you to help determine how much it would cost to replace your home if it was totally destroyed.
These calculators are an estimate only, so for a more accurate rebuilding cost estimate, you should consult a professional valuer or building contractor.
When should I buy home insurance?
You may wish to have home insurance in place by the time you enter into a contract to purchase a property, because this is usually when you become legally obliged to buy, though this varies from state to state. You may wish to speak to your lawyer or conveyancer about the rules in your State or Territory.
If insurance is required as part of your mortgage contract, you’ll generally need to send a copy of the cover (also known as Certificate of Currency) to your home loan provider before they can release the funds for settlement. They basically need to see proof of your insurance noting the lender as having a financial interest in the home before they will allow you to settle on your home loan.
NB! Be sure you check your contract
- It’s important to check your home loan contract to see what applies to you. Ask your conveyancer or solicitor if you’re unsure.
Getting contents insurance could be a smart move too
If your home was totally destroyed, what about your contents? Could you afford to replace them all yourself? For extra peace of mind consider insuring your contents too.
Many insurance providers offer bundling discounts, so getting your home and content insurance together with the one insurer could also be a more cost-effective way to insure both the home and belongings you love.
Quality cover’s just a click away
If you need home insurance to protect your new property or contents insurance to cover your much-loved belongings, ING Home and Contents Insurance has your back. Did you know you could get 30% off your first year’s premium when you buy a combined ING Home and Contents Insurance policy online? (T&C’s apply – see disclaimer below)
Home and Contents insurance
ING Home and Contents Insurance is issued by Auto & General Insurance Company Ltd ABN 42 111 586 353 AFSL 285571 as insurer. It is distributed by Auto & General Services Pty Ltd ABN 61 003 617 909 AFSL 241411 (AGS) and by ING Bank (Australia) Ltd ABN 24 000 893 292 as Authorised Representative 1247634 of AGS. ING is a business name of ING Bank (Australia) Ltd (ING). An ING Insurance policy issued does not represent a deposit with or liability of, and is not guaranteed or otherwise supported by, ING or its related bodies corporate. ING will receive a commission from AGS for each policy purchased which is a percentage of the base premium. For further details see the Financial Services Guide.
ING Home & Contents Insurance is subject to AGS’ underwriting and ING’s Customer Eligibility and Name-Screening Assessment. Home & Contents Insurance is not available in NT, North QLD or Northern WA.
This is general information only, and does not take into account your particular objectives, financial situation and needs and you should consider whether it is appropriate for you having regard to these factors before acting on it. Read the relevant Product Disclosure Statement, Target Market Determination, Key Fact Sheets, Financial Services Guide and the ING Customer Eligibility and Name-Screening document available at ing.com.au and consider if an ING Home & Contents Insurance product is right for you before deciding to purchase or continue to hold the product.
The price quoted is at the insurer’s sole and unrestricted discretion. It is based on the profile of the risk to be covered and any other factors the insurer may choose. These factors may change at any time without notice, as may the prices. Discounts are applied by the insurer. Any discounts on both new and renewing policies only apply to the extent that any minimum premium isn’t reached. If the policy renews, the price may exceed the price paid for the previous policy. Premiums are subject to change. You will be responsible for all applicable GST and other statutory charges.
DISCOUNTS: Discount applies to the first year’s premium paid for a new ING Home & Contents Insurance policy obtained online for approved applicants only. Discounts do not apply to any renewal offer of insurance. Discounts are applied before government charges, taxes, levies and fees, including instalment processing fees (as applicable). The full extent of discounts may therefore be impacted. All rights are reserved to change the offer without notice. The discount applies accordingly:
ING Home and Contents Insurance: 30% discount on combined Home & Contents Insurance, 15% for Home only or Contents only policies.