Home insurance in NSW (New South Wales)

A home insurance policy (also known as building insurance) is an insurance policy designed to provide financial protection against damage to the insured building. This will typically include any garages or carports at the insured address.

Home/building insurance will typically cover you for structural damage to your building, like damaged walls or broken windows. It doesn’t provide cover for the contents of your home as that doesn’t form part of the building itself.

If you’re looking to insure your belongings inside a building that isn’t yours, a standalone contents insurance (also known as renters insurance) policy could be the solution.

Contents insurance will provide you with financial protection against the damage, theft, or loss of a building’s contents (i.e. things that are not part of the building itself). It can be useful for renters (hence the name), and others who don’t own the building they live in.

Need to insure both a building and its contents? A combined home and contents insurance policy combines the above two types of cover into one policy.

A combined home and contents insurance policy is typically appropriate for those who’ve bought a building to live in rather than rent out, as they’ll generally own both the building and its contents.

Landlord insurance is a specific type of building and contents insurance designed for those with investment properties being rented out. It can provide cover against damage and vandalism to the owner’s building, as well as furniture and fixtures owned by the landlord at the insured address. It can also cover loss of rent due to tenant default.

As with regular home and contents insurance, landlords can choose to take out a standalone building insurance policy or a standalone contents policy, or combine the two into a landlord building and contents insurance policy.

If you own or manage a building of rental units or are part of a shared land strata scheme via a body corporate, you’ll typically need to take out a strata insurance policy rather than typical home and contents insurance.

Strata insurance can provide cover for an entire building or shared piece of land, as well as cover loss of rent and temporary accommodation costs if a unit cannot be lived in following an insured incident.

If you take out a home and contents insurance policy in New South Wales or anywhere else in Australia, your building and/or contents will typically be protected against the following insured events:

• Storm and rainwater damage
• Fire and smoke damage
• Theft or attempted theft
• Escape of liquid causing damage
• Lightning damage
• Explosion damage
• Earthquake or tsunami damage
• Breakage of glass

Additionally, depending on the insurer and policy, you may be able to add some or all of the following optional covers to your policy for an extra cost:

Always read the relevant Product Disclosure Statement (PDS) for any insurance policy you’re considering for full details on inclusions, exclusions, and annual limits. The Target Market Determination (TMD) could also help you decide whether the product is right for you.

The cost of home and contents insurance in NSW will vary greatly based on several factors, including:

• Your chosen level of cover. You’ll typically pay more for building insurance than contents insurance, and more again for a combined home and contents insurance policy. You’ll also pay more in premiums if you add optional cover to your policy, like portable contents cover or motor burnout.
• Where the building is located. Different parts of New South Wales will have a higher insurance risk rating than others based on the risk of flooding, being damaged by a bushfire or the likelihood of a break-in or theft claim. If you live in an area with a high risk rating, your insurance premium will be higher.
• The insured amount you choose. The amount you elect for your building’s sum insured will be the estimated cost to rebuild your home, and any structural improvements on the site, and for contents the sum insured will be the replacement value of your belongings kept at the site.

Home and contents insurance policies taken out in New South Wales (or anywhere else in Australia) will typically provide cover for damage or loss caused by bushfire as a standard inclusion. If your home is adjacent to or nearby bushland, the of your home and contents insurance premiums will likely be higher.

You’ll want to ensure you’re adequately insured for bushfire damage based on your building’s fire risk and select an insured amount that will be enough to fully replace your building and belongings.

Flood insurance isn’t compulsory in New South Wales, but many insurers include it as part of their standard home and/or contents insurance policies. Depending on where you live, your policy may be more or less expensive based on the area’s flood risk.

Certain parts of NSW may be at a high risk of flooding, meaning that taking out a policy that includes flood cover in those areas could see you paying much higher premiums than usual. However, if you live in a relatively flood-free area, some insurers will offer the option to remove flood cover from your policy to reduce the cost of your home and contents insurance premium. This is known as ‘opt-out flood cover’.