Tips for first-time home insurance buyers

Last updated on Sept 15, 2022 
Looking to purchase your first home insurance policy but not sure what to consider? In this guide for first-time home insurance buyers, we explain the different types of home insurance and what to keep in mind when choosing a policy.

Becoming a home owner is a major life achievement, and it’s also one of the most expensive purchases you’ll make. That’s why it’s important to have adequate home insurance in place so your asset is covered as soon as you own it. Although it’s not a legal requirement, some lenders may require you to have home insurance as a condition of your mortgage.

But don’t leave this step to the last minute. As soon as you take ownership of the property, you’re financially liable for any loss or damage that occurs to it. In NSW, VIC, WA and NT, your responsibility begins on settlement, whereas in QLD, TAS, SA and ACT, you may need to have insurance in place as soon as you exchange contracts.

There are two main types of home insurance – building insurance and contents insurance.

Building insurance covers a home’s physical structures from loss or damage. This includes the building itself, along with your garage, fences, paved driveways, and even fixtures like hot water systems and air conditioners. Learn more about building insurance.

If you’ve bought into a complex that’s managed by strata, such as an apartment, it might already be covered by residential strata insurance (body corporate insurance) – your strata can help confirm what is covered and what falls under your responsibility.

Contents insurance covers the contents of your home from loss or damage. This includes your furniture and carpets, window coverings, electrical appliances, your barbeque, tools and even your clothes and shoes. Learn more about contents insurance.

The amount you choose to insure your home and contents for is known as the sum insured. A home insurance calculator is a tool which you can use to help estimate the replacement cost of your home and contents. When determining how much contents cover you need, include all of your contents such as furniture, art, electronics, gardening tools and even clothing and accessories.

When you take out home insurance, it is handy to review and make sure the amount you’re insured for reflects the actual cost to rebuild your home and replace the contents. When a policy doesn’t fully cover the cost of replacing your home and contents, you might be underinsured – meaning you’ll need to cover any shortfall yourself. Alternatively, having cover that exceeds your needs can mean you’re overinsured and potentially paying too much for your insurance. Retaining proof of purchase (i.e. receipts) and taking photos of items will also help you calculate the true cost of your contents, as well as coming in handy if you need to make a claim.

Choosing a home insurance policy that suits your needs will help you get the most out of it. There are many areas to consider when choosing cover – this may include:

  • Understanding the risk of natural disasters in your location. If your home is in an area that’s prone to natural disasters such as floods, bushfires or cyclones it’s wise to check if the insurance policy will cover you for these events and that the premium is within your budget.
  • Considering optional cover. Optional covers allow you to upgrade your cover with additional cover that aren’t included in a standard home insurance policy for an additional premium. Examples include Portable contents cover (cover for items that you wear or carry outside your home), accidental damage and motor burnout.
  • Looking for offers. Many insurers offer discounts on combined policies. For example, Allianz offers a 10% discount when you take out a combined Building and Contents Home Insurance policy1.3. You could also receive up to a 30% No Claim Bonus depending on your claims history2,3.
  • Conducting a policy health check. It’s a good idea to regularly review your insurance cover with an annual policy health check – free of charge if you’re with Allianz. It’s a simple check-in to make sure your details, excess, cover and payment frequency are still appropriate for your circumstances.
  • Investing in home maintenance and upgrades. Upgrading your security system or making your home more resilient to natural disasters and other incidents can help look after it and, in some cases, even reduce the cost of your insurance. Trimming trees, using non-combustible building materials, and having electrical wiring moved higher to reduce issues during flooding, are just some of the ways you can help look after your home and contents.

There’s a lot to think about when buying your first home, including choosing the right home insurance. Have some questions about our Home Insurance covers? Contact our team to help you decide what best suits your needs or keep learning about home insurance.

This article has been prepared by Allianz Australia Insurance Limited ABN 15 000 122 850 AFSL234708 ("Allianz"). In some cases, information has been provided to us by third parties and while that information is believed to be accurate and reliable, its accuracy is not guaranteed in any way.

Any opinions expressed constitute our views at the time of issue and are subject to change. Neither Allianz, nor its employees or directors give any warranty of accuracy or accept responsibility for any loss or liability incurred by you in respect of any error, omission or misrepresentation in this article.

*Conditions apply
  1. Combined Discounts
    A discount of up to 10% is applied to your premium when you combine Buildings and Contents on one Home Insurance policy, including for the following optional covers if selected: Motor Burnout and Accidental Damage cover. The combined discount doesn't apply to Landlord policies, Flood or Portable Contents optional cover.
  2. Up to 30% No Claim Bonus – Home
    When you take out a new policy, we calculate your No Claim Bonus based on your Home Insurance claims history. To qualify for the maximum No Claim Bonus of 30%, Home Insurance customers must’ve had no Building or Contents insurance claims in the preceding five years. However, customers who have had claims may still qualify for a reduced No Claim Bonus.

    After each claim-free year, the No Claim Bonus applied to your renewal premium will be increased by 10%, to a maximum of 30%. However, for every claim you make in a year, the No Claim Bonus applied to your renewal premium will be reduced by 10% to a minimum of 0%.

    The No Claim Bonus is applied to some optional covers if selected; Motor Burnout and Accidental Damage, but not Flood or Portable Contents cover.
  3. Minimum premiums may apply
    Any discounts may be subject to rounding and only apply to the extent that any minimum premium isn't reached. If you’re eligible for more than one discount, Allianz applies them in a predetermined order. This means the effect of applying any subsequent discount will be reduced.

    For example, the aggregate effect of applying two discounts consecutively means that you won't see the full benefit of both these discounts.

    Discounts don't apply to taxes or government charges. No discounts are applied to the optional cover: Domestic Workers' Compensation (if available and selected).
Allianz acknowledges Aboriginal and Torres Strait Islander peoples as the Traditional Custodians of the lands on which we live and work across Australia. We pay our respect to First Nations Elders past and present.

Any advice here does not take into account your individual objectives, financial situation or needs. Terms, conditions, limits, and exclusions apply. Before making a decision about this insurance, consider the relevant Product Disclosure Statement (PDS)/Policy Wording and Supplementary PDS (if applicable). Where applicable, the PDS/Policy Wording, Supplementary PDS and Target Market Determination (TMD) for this insurance are available on this website. We do not provide any form of advice if you call us to enquire about or purchase a product.

Allianz Australia Insurance Limited ABN 15 000 122 850 AFS Licence No. 234708 is the insurer of any general insurance products offered, and Allianz Australia Life Insurance Limited ABN 27 076 033 782 AFS Licence No. 296559 is the insurer of any life insurance products offered. Each entity is responsible for any statements and representations made about its products, on this website.