Home and Contents Insurance in Australia: What Is and Is Not Covered

Home insurance covers the building structure, while contents insurance covers your belongings inside. Many Australians bundle both into a combined policy for complete protection. Key exclusions typically include wear and tear, deliberate damage, certain natural disasters (depending on the policy), and maintenance issues.

Understanding Home and Contents Insurance in Australia

Home and contents insurance protects your most valuable assets, but understanding what each type covers is essential before purchasing. According to the Insurance Council of Australia, many Australians underinsure or choose the wrong policy type because they do not understand the difference between home (building) insurance and contents insurance.

Home insurance covers the physical structure of your dwelling, while contents insurance protects your possessions. You can purchase these separately or as a combined policy. Each has distinct coverage boundaries and exclusions that affect your financial protection after loss or damage.

Coverage Comparison Table

Aspect	Home Insurance	Contents Insurance	Combined Policy
Structure	Walls, roof, fixed features	Not covered	Covered
Belongings	Not covered	Furniture, electronics, clothing	Covered
Fixtures	Built-in cupboards, benchtops	Not covered	Covered
Removable items	Not covered	Curtains, appliances	Covered
Temporary accommodation	Often included after insured event	Not typically included	Often included
Liability cover	Usually included	May be included	Included
Average cost	A$600-A$1,200/year	A$200-A$500/year	A$800-A$1,500/year

Home (Building) Insurance: What Is Covered

Home insurance protects the physical structure of your dwelling. According to ASIC MoneySmart, standard home insurance typically covers the building structure, permanently attached fixtures, and structural damage from insured events.

Standard coverage includes:

Walls, roof, floors, and foundations
Permanently fixed features such as built-in wardrobes, kitchen cupboards, and bathroom fixtures
Pergolas, verandahs, and fixed sheds
Fences, gates, driveways, and paths
Damage from fire, storm, theft, vandalism, and burst pipes
Temporary accommodation costs if your home becomes uninhabitable after an insured event
Public liability for injuries occurring on your property

Common exclusions:

Wear and tear, gradual deterioration, and rot
Poor maintenance or faulty workmanship
Flood damage (unless specifically included)
Earthquake, landslide, or erosion (check your Product Disclosure Statement)
Damage from pests such as termites or rodents
Damage that occurred before the policy started
Deliberate or illegal acts by the policyholder

Contents Insurance: What Is Covered

Contents insurance protects your personal belongings inside your home. This cover applies whether you own the property or rent, making it essential for tenants who do not need building insurance.

Standard coverage includes:

Furniture, beds, and soft furnishings
Electronics, appliances, and home entertainment systems
Clothing, jewellery, and personal items
Curtains, blinds, and removable floor coverings
Tools and sporting equipment
Portable items temporarily away from home (limited cover)
Food spoilage if a power outage affects your refrigerator or freezer

Common exclusions:

Items above specified limits (such as jewellery, art, or collectibles) unless separately listed
Motor vehicles, caravans, or watercraft
Business equipment or stock
Money, stamps, or securities beyond set limits
Damage from pests or vermin
Wear and tear or gradual deterioration
Loss or damage occurring outside Australia (unless specifically covered)
Unattended items in vehicles

Combined Home and Contents Policies

Combined policies bundle building and contents cover into one package, often at a discount compared to purchasing separately. According to Finder Australia, combined policies simplify claims when damage affects both structure and belongings, as you deal with one insurer and one excess payment.

Advantages:

Single premium and renewal date
Administrative simplicity with one policy document
Often lower total cost than separate policies
Streamlined claims process for events affecting both building and contents
Consistent cover levels and excess structure

Considerations:

May not suit investment properties where you only need building cover
Tenants waste money paying for building insurance they do not need
Less flexibility to adjust individual cover levels

Which Policy Suits Your Situation

Homeowners: A combined home and contents policy provides complete protection. Ensure your sum insured reflects rebuild costs (not market value) for the building, and replacement value for contents.

Landlords and investors: Home insurance only is usually sufficient, as tenants should arrange their own contents cover. Consider landlord-specific policies that include rental income protection and tenant-caused damage.

Tenants and renters: Contents insurance protects your belongings. You are not responsible for insuring the building structure, but your lease may require you to hold public liability cover.

Unit and apartment owners: Check your strata or body corporate insurance certificate. It typically covers common property and the building structure, but you need contents insurance and may need cover for internal fixtures and fittings you have added or upgraded.

Reading Your Product Disclosure Statement

Coverage and exclusions vary significantly between insurers. Before purchasing, always read the Product Disclosure Statement (PDS) and the Target Market Determination (TMD) to understand exactly what is and is not covered. Pay particular attention to:

Flood and water damage definitions (many policies distinguish between flood, storm water, and burst pipes)
Sum insured limits and whether they are adequate for full replacement
Excess amounts for different claim types
Special limits on high-value items
Exclusions specific to your region (such as cyclone or bushfire)

Conclusion

Home insurance and contents insurance serve different purposes, and choosing the right combination depends on whether you own or rent your property. Homeowners typically benefit from combined policies, while tenants need only contents cover. Always verify current terms in the Product Disclosure Statement and confirm coverage details with a licensed insurance adviser before deciding, as exclusions and limits vary by insurer and by state or territory.

General Advice Warning: This article provides general information only and does not take into account your personal objectives, financial situation, or needs. Before acting on any information in this article, you should consider whether it is appropriate for you, read the relevant Product Disclosure Statement (PDS), and consider obtaining personal advice from a licensed insurance adviser. Coverage, exclusions, and availability vary by insurer and by state or territory. All premiums and coverage details are provided as examples only and are current as of July 2026. Always verify current terms directly with insurers or through a licensed adviser before purchasing.