How to work out how much Home Insurance you really need

This is a guest post in collaboration with NRMA

Whether you live in a one-storey bungalow, a three-storey townhouse or a two-bed apartment, you know and love your home better than anyone.

But do you know if you have the right level of insurance?

If you were a victim of flood, theft, storm damage or bushfire, ask yourself – would your insurance cover the cost to rebuild your house and replace all of its contents?

Home insurance covers two different types of policies – home buildings insurance and home contents insurance. However, you will often find policies that group both home buildings and contents insurance together.

To ensure that your policy is effective you must ensure you have adequate, and up to date cover. Here are some top tips and tools for working out how much home insurance you really need for your family home:

How much home buildings insurance do I need?

Your home buildings insurance policy should cover enough to rebuild your home from scratch if it were destroyed.  This means not only taking into consideration the cost of the labour and materials, but also other extra costs such as:

– The removal or demolishing of debris

– The cost of renting temporary accommodation for you and your family

– The costs associated with meeting new building regulations

The cost of rebuilding a house will vary greatly depending on state, size, materials used to build it and the standard it was built to. In order to get an accurate calculation of how much it would cost to rebuild your home, it is a good idea to use an online calculator where you will be asked to input details that are specific to your property.

You will be asked to provide information such as:

  • What year was your property built in?
  • Is your property built on a slope?
  • What additional features does your property have– e.g. air conditioning, solar panels, security systems or fireplaces.
  • What do you have outside the house – garages / verandahs / carports?
  • What are the walls made of?

It’s important that the information you provide is as accurate as possible so that you can get an adequate policy that covers your home.

How much contents insurance do I need?

The simple answer to this is to take out a policy that covers you for the value of what things are worth. Home contents insurance covers the cost of replacing or repairing your household contents, such as:

– Whitegoods

– Furniture

– TV’s

– Computers

– Jewellery

Before you start to calculate how much home contents insurance you will need it’s a good idea to work your way around the house room by room creating an inventory, making a list of what you own and taking photo’s of the items as you go along.

Living room

Work out the value of all the furniture in the room such as the sofa, coffee tables, bookcases (and books).Include all the electrical items such as TVs, computers, DVD players and sound systems. Finally make a note of soft furnishings such as carpets, rugs and curtains.

Kitchen

It’s likely you will have some expensive whitegoods, so make sure to include your fridge, washing machine, kettles, microwaves and any other appliances. Pots, pans, and any other equipment should also be on the list.

Dining room

Add your dining room tables and chairs, and don’t forget to add any crockery, cutlery or glassware that lives in this room.

Bedrooms

Once you have included your bedroom furniture, work your way through any personal electronics like laptops, phones or tablets. Don’t forget to include the value of your clothes, shoes, bedding and the children’s toys.

Outside your home

Take into account any garden furniture or equipment, such as lawn mowers or gardening tools. Note bikes or play equipment you keep outside, such as swings, slides and trampolines.

As life changes, so do our needs and our belongings. So make sure you reassess your home and contents insurance on an annual basis – to ensure that your home insurance policy is sufficient to cover your family home and everything in it.

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