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Home and contents insurance reviews

Keep hikes to your home and contents policy at bay with our complete guide to home and contents insurance.
 
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01 .Compare home insurance

home and contents insurance

Home insurance recently got a lot more expensive, and the insurance industry has been unclear about why exactly.

Make an informed decision using this CHOICE home and contents insurance comparison and review.

What you’ll get in this report:

Please note: this information is now out of date but is still a useful guide to today's market.

The right cover

We help you avoid the growing costs of home insurance by making sure you’ve got the right cover at the right price. We’ve designed two easy-to-understand categories – standard and top level cover – and recommendations under those categories, along with advice you can use to better understand your insurance needs.

We also provide a full features table so you can compare home and contents insurance products side-by-side for yourself too.

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How we test

We obtain quotes and policy details from 29 insurers based on four scenarios, which take into consideration the occupants’ ages, family size, house types and sum insured. Policy features are scored for insured events and the degree of coverage for damage or loss to contents and building.

For example, we look at:

• Under-insurance protection for home insurance
• Limits for various items under contents insurance
• Cover for flood, fire, storm surge and tsunami

Policies that score in the bottom half for features are excluded from the best buy selection. The remaining policies are weighed 50:50 for policy features and premium price. The four highest scorers for both standard cover and top cover in each state and territory earn a best buy.

Where are the premium prices?

Home and contents insurance is risk rated, which means the premiums are calculated on a number of factors. These factors could include the neighbourhood you live in, your age and building construction (or all of the above).We look at thousands of premiums across the scenarios to establish trends, but printing the actual prices would only be confusing and to no real benefit. Prices also tend to change without warning.

Use the recommendations as a guide and then get your own personalised quote from an insurer before deciding on home and contents insurance.

64 policies from 29 brands

  • 1300 Insurance
  • AAMI
  • Allianz
  • ANZ
  • Apia
  • Australian Unity
  • Bank Of Melbourne
  • Bank SA
  • Budget Direct
  • CGU
  • Citibank
  • Coles
  • CommInsure
  • GIO
  • NRMA
  • QBE
  • RAA
  • RAC
  • RACV
  • Rams
  • Real
  • SGIC
  • SGIO
  • St George
  • Suncorp
  • TIO
  • Westpac
  • Woolworths
  • Youi
 
 

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Pay less

  • Get quotes from three insurers - some will match or beat competitors’ premiums.
  • Vary your excess, as small increases in the excess can lead to big savings on premiums
  • Many insurers offer cheaper premiums for new business than they do for renewals. Simply checking your renewal price on your current insurer’s online quote calculator could save you plenty

Don’t under-insure

The amount for which you’re covered depends on your policy:

  • A sum insured policy pays claims up to the sum insured amount specified on the insurance certificate.
  • Extended replacement pays a specified percentage – as much as 30% – above the sum insured amount.
  • Total replacement cover pays whatever it costs to repair or rebuild the building, taking into account policy exclusions.
  • Most policies are sum insured, but some standard policies offer extended replacement as an optional extra and several top policies include extended replacement. 
  • AAMI and ANZ are the only insurers in our survey offering total replacement policies.
  • During times of disaster, building and temporary accommodation may be in short supply and prices will go up. If you live in an area that is prone to natural disaster such as flood or fire consider purchasing extended or total replacement protection.
  • Look out for removal of debris, building or architect’s fees, costs to comply with council regulations, increased cost of material in a widespread disaster, temporary accommodation costs and mortgage discharge fees to name a few. Make sure the benefits for under-insurance protection are paid on top of the sum insured.
  • Go through every room of your home and estimate how much it would cost to replace each item. Include everything, such as commonly overlooked items like crockery and cutlery, bed linen, books, CDs, clothing and footwear. It’s a good idea to take clear, close-up photos, and be sure to store any relevant receipts or proof of purchase.
  • Contents policies usually set a limit for valuable items, such as up to $1000 per item and up to $5000 in total for jewellery. If you have items that exceed the limits provided, you need to list them separately with your insurer. If you choose not to do this, you won’t be able to claim any higher than the standard sub-limit regardless of how much your valuables are worth.
  • Before you purchase or build a home, get a few quotes from insurers. Premiums may be unaffordable for flood-prone areas. Check with the local council to see if flood maps are available

Keep records

  • Keep records of email and phone communications of your insurer confirming definitions and coverage, in case of any future dispute.
  • Do your own insurance evaluation - are there dangers around the home waiting to cause damage or an accident? Leaky roofs are a common cause for claims-denial according, so this is a good place to start.
  • At each renewal, take photos proving how spick and span your building and contents are in the event you need to make a claim.

Optional and additional benefits

Some policies don’t include full coverage but allow you to buy extra cover for an additional amount. The most common optional covers include:
  • Burnout of electric motors (fusion)
  • Flood
  • Domestic workers’ compensation
  • Pet cover
  • Variable excess (increasing this will lower your premium, just remember you will need to pay it in the event of a claim. A higher excess makes small claims less valuable.)

The most troubling development for the many homeowners we’ve heard from since our last market-wide report has been the addition by the insurers’ of mandatory flood cover. And the extra cover hasn’t come free; we’ve heard from many whose premiums have doubled or more. Almost 60% of policyholders who we surveyed last year noticed a premium increase on their insurance renewal, and the most common reason given was the addition of mandatory flood cover. We weren’t shocked to discover, then, that the majority of the insurers we reviewed now include flood cover regardless of whether or not you live in a flood zone.

Of the 29 insurers and 64 policies we researched, only 1300 Insurance, BudgetDirect, and Youi policies exclude flood cover (as per the now standard definition), while AAMI, Allianz and NRMA will allow some customers to opt out.

Understandably, consumers who don’t live in flood-prone areas aren’t very happy that they may be subsidising people who do. “My premium hiked up 40% due to payouts for earthquakes, floods and bushfires,” one CHOICE member recently told us. “The risk of these happening in my area is extremely remote, but my insurer said all insurance premiums had to rise to pay for the risks in other areas.”

Before looking for a policy that excludes flood cover, make sure you’re really not at risk. Many insurers use local council data and the publicly available National Flood Information Database – sources you can also tap into to assess your flood risk.

Standard Definition of Flood: The following standard definition for flood has been approved by the Commonwealth and must be included in the insurance contracts of all insurance companies within the next two years. According to the regulations, the word "flood" means the covering of normally dry land by water that has escaped or been released from the normal confines of any lake, river, creek or other natural watercourse, whether or not altered or modified, or any reservoir, canal, or dam.

Source: Insurance contracts Regulations 1985

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