Kerryn Boogaard Kerryn Boogaard
Beverly Goldsmith Beverly Goldsmith
Zoe Bingley-Pullin Zoe Bingley-Pullin

What Is Home and Contents Insurance?:

If you haven't heard of contents insurance, read this.
By Expert Tips
Date: April 27 2022
Editor Rating:
475 x 315 (3)

Insurance is always a good idea if you're a property owner; however, the amount of coverage matters in getting the best protection insurance can provide. The same analogy applies to homeownership. Homeowners insurance often covers two categories of items—the physical structure (covered by buildings insurance) and your personal belongings (covered by contents insurance).

Often, homeowners cover their buildings, neglecting their personal belongings. But losing your personal belongings can burden you with huge unexpected costs in replacing them. Therefore, protecting your home on both fronts can be the best option for homeowners. This article focuses on what home and contents insurance is and how you can benefit from its policies.

Home and Contents Insurance Defined

According to Business Insider, the average age of a first-time homebuyer is 45 years, and that lucky person might end up spending over $200,000 as per the National Realtor Association's statistics. No doubt, buying a home is a unique accomplishment for many people. Irrespective of the cost, homeowners need enough protection to secure their personal property and investment. That's where home and contents insurance comes in handy.

Contents and home insurance is a combined policy comprising buildings and contents. It covers the physical structure and every fixture or fitting that comes with it. This includes windows, doors, sockets, etc. Additionally, it covers the valuable items in your home that may not be attached to your building's physical structure. You can think of it this way: If you had to move to a new home, everything that you take along with you could fall under contents insurance. Typical examples include clothing, floor rugs, appliances, etc.

How It Works

Mortgage lenders may require you to have buildings insurance as a lending condition. For renters, it's a different situation. Landlords are responsible for the physical structure and its fixtures and fittings, but your landlord will have minimal help to offer when you lose the contents of your home to a fire, flood, or burglary. Contents insurance can be a great option if you seek to protect every possession in your home. But how does this policy work?

Contents insurance policies come in two types: indemnity and new-for-old. The indemnity concept of contents insurance considers wear and tear in processing insurance claims. That way, you can't get beyond a specific policy limit based on your contract. For instance, if you lose a five-year-old rug to a leaky roof, your insurance provider can only pay enough for you to get another five-year-old rug.

As the name suggests, new-for-old contents insurance can pay you enough for a brand new rug. And as a general rule of thumb, new-for-old policies cost more than indemnity content insurance policies. This analogy often leaves many prospective content insurance policy owners with one question: how much content insurance should one get?

Contents insurance policies are entirely optional, and such decisions are typically based on preference. However, insuring your belonging for what they are worth can be a great option. You can download a contents calculator to get a 360-look at your belongings and their total value. If you must go manual, ensure to be thorough and accurate. Valuing your items too low can shortchange the payout you receive to replace them. However, over-valuing your items can also mean paying higher premiums than necessary.


Some specific home and contents insurance benefits can include:

  • Protection from disasters: The insurance protects your home and belongings from loss, theft, or damage.

  • One provider for all: Separating buildings and contents insurance means committing to both policies' details and due diligence. That means different renewal costs, processes, and paperwork, which might be stressful. The combined option can give you more for less.

  • Stress-free process: The insurance doesn't only save you from higher premiums. The combined policy also makes the insurance process for homeowners seeking both benefits easier.

All in all, home and contents insurance prepares you for uncertainties. It can be a great option to enjoy maximum coverage for your home even though it's optional.

Share This Tweet This Email To Friend
Recent Comments
0 Total Comments
Post a Comment
* your email address will not appear

Please enter the word you see in the image below:

Post a Comment
* your email address will not appear

Please enter the word you see in the image below:33343

Your Comment has been posted
Related Articles
Motherpedia cover
Read on to find out another way of securing your…
Read more

Latest Tech Used In Shipping Containers
Read how the shipping industry has revolutionised

Motherpedia cover-2

Win 1 set of a 4-book hardcover illustrated boxed set
Barbara Murray’s new 4-book Sound Stories is perfect for parents and educators and could assist with NAPLAN results

Motherpedia cover (4)

Where to celebrate Oktoberfest Australia
Get ready for this celebration!

Vtech giveaway motherpedia

Win 1 of 3 VTech Toys Pack Giveaway
Playtime is so much more with VTech

Motherpedia cover-4

A Fortnight of Foodie Experiences at East Village
A taste of East Village. What's in it for me?

Globber my too fix up cover

We Try: Globber My TOO Fix Up
A scooter that grows with your child

Throw a winning cricket pitch

3 Steps to a Winning Backyard Cricket Pitch
Ex-Adelaide Oval legend curator Les Burdett shares his tips for getting your backyard cricket pitch test match ready this summer

A bike that follows your kids life cycle - motherpedia - cover

A Bike That Follows Your Kids Life Cycle
Check out the Bunzi 2-in-1 gradual balance bike!

Moonlight lifestyle

Moonlight Cinema to bring…
Moonlight Cinema announces brand new Western Sydney venue

Screen shot 2019-11-26 at 8.29.12 am

Your Magical Christmas Wonderland…
Adventure park is about to light up the night sky with its "Christmas Festival of Lights"

Screen shot 2019-11-21 at 11.11.36 am

The Preston Market Gets…
It's time to feel pumped up for the holiday season!


Bunnings team members get…
Help raise funds by buying a snag or donating at your local store.