Building Insurance

Find and compare building insurance policies to lock in the best one to suit your needs.

Building Insurance

Insuring your property is one of the first steps homeowners have to take immediately post-purchase. Your property is, after all, your most valuable asset. Finding the right option to suit your needs isn’t as hard as you might think when you compare between policies; there’ll always be a building insurance policy in Australia to suit you. Learn more about the ins and outs of building insurance, how it works and how you can find the best deal through comparing your options.

What is building insurance and how does it work?

Building insurance, otherwise known as home insurance, is a type of insurance policy designed to cover damage sustained by your property. In the same way that you’d insure your car in case it gets damaged or written off in an accident, it’s always essential that you prevent yourself from getting into a situation which could end up costing you tens of thousands of dollars out of pocket.

It’s worth noting, though, that building insurance is not the same product as home and contents insurance. While the “home” aspect of home and contents insurance aligns with building insurance, the “contents” coverage isn’t offered under a sole building insurance policy. Contents insurance covers you financially for damage, loss and destruction of your possessions under certain circumstances. While building insurance presents itself as a cheaper option for insuring your home, home and contents insurance provides customers with far greater coverage and peace of mind.

What will my building insurance policy cover?

A good building insurance policy will cover you for as many different types of property damage as possible. When comparing a building insurance quote with other options, you should always keep in the forefront of your thinking the scope of coverage you’d be receiving under each policy. Most building insurance policies will cover some, or all, of the following types of damage:

Type of damage covered Why it’s important to have
Theft/burglary
This applies to the damage your property may sustain, such as fences, doors or windows. While this may only qualify as theft if you have possessions stolen, most insurers will also provide coverage for damage sustained through an attempted theft or burglary. It’s important to note that not all insurers will offer coverage for broken windows under their building insurance policy, but it’s often available as an optional extra. Coverage can also extend to intentional destructive acts with no view to theft or burglary.
Extreme weather

Incidents such as fires, floods, lightning and hailstorms can all cause significant damage to your home, particularly if you’re living in an at-risk area. Fortunately, in most cases, you’ll be covered for the damage to your property caused by these events. One thing to bear in mind is insurance providers’ differing definitions of these events. For example, while flood coverage will likely include water overflowing from a river, lake or creek, any damage caused by high oceanic tides or rising sea levels probably won’t be.

Escape of liquid
Different to flooding, this relates to events such as the bursting of pipes or damage caused by water leakage or overflow from appliances like fridges, baths, toilets and washing machines. In extreme circumstances, this water damage can rival that caused by major flooding, so you should look for coverage in this area. You may not be granted any reimbursement for your claim if your insurer deems that you haven’t done a sufficient job in ensuring appliances, pipes and drains are in a reasonable condition.
Animal damage
Coverage of this nature is generally limited to damage caused to your property by non-vermin animals. As such, pests like insects and rodents won’t be covered for animal damage. However, if a dog breaks into your backyard and wreaks havoc or a bird finds its way down your chimney and leaves a trail of destruction across your house, you may have grounds to make an insurance claim.
Impact damage
This refers to damage caused to your property by an external force colliding with it. In most cases, impact damage is limited to that caused by a tree or another vehicle. For example, if a motorcycle crashes into your front fence, you’re likely to be covered for the cost of repairs.
Civil commotion or riot
Damage sustained to your property by an angry mob is covered by many building insurance policies. An instance of this would be if a large group of people ran through your street and intentionally or recklessly damaged various houses along the way, including your own.

The pros and cons of building insurance

Here are some factors to consider when tossing up whether to take out a building insurance policy

PROS

Less expensive alternative

If you don’t have to worry as much about contents, as is the case for someone like an investment property owner, this is a cheaper option than home and contents insurance.

Wide property damage coverage

As can be seen in the table above, building insurance covers a variety of different types of damage.

Deal with one insurer and one policy

Adding contents coverage could add greater complications to your payment cycles, particularly if you’re looking for individual building and contents insurance policies. Sticking with just one policy keeps things simple with you payment cycle.

CONS

Doesn’t cover contents

For owner-occupied properties, it’s usually advisable to take the hit on the several hundred dollars extra for contents insurance to cover your valuables.

Forcing you into optional extras

Insurers may not list all of their intended coverage areas under their building insurance policy and will instead charge you for optional extras such as accidental damage and motor burnout cover.

Still paying out of pocket

Like most insurance policies, you may still have to pay a significant amount out of pocket even if your claim is covered by your insurance policy.

How to choose building insurance?

You’ll most likely get a choice between sum insured cover and total replacement cover for your building insurance. Find out which one will suit you best.

Any other building insurance queries?

We’ve listed some of the most frequently asked questions about building insurance below for you to think about

Should I take out building insurance if I’m renting out my investment property?

Yes – it’s important to insure yourself against any potential damage that your investment property may sustain while being rented out to someone else. You might also look to take out landlord insurance instead of building insurance, which functions in a similar way to home and contents insurance but focuses its coverage on permanent appliances and fittings. For example, if your tenants rip your curtains off their railing, you’d be able to make a claim under your landlord insurance policy.

What type of building insurance should I take out for a commercial property?

Commercial property insurance or business insurance is a type of insurance designed to cover properties of this nature. Depending on your insurer, it can cover you for a range of different types of damage, including damage caused to property, stock and equipment as well as covering your liability for accidental injury claims.

Should I take out a building insurance policy if I’m renting a property?

No – since you don’t own the property you’re living in, you shouldn’t be held liable to cover this damage through your own insurance. You should take out a renters’ contents insurance policy in this position, though, as you’re just as likely to have a break in at a rental property as you are at an owner-occupied property.

How much cover will I need for my building insurance?

This will depend on a number of different factors, such as:

  • The size and nature of your property
  • The area in which your property is located
  • How much you can afford to pay for premiums
  • How much you can afford to pay for excess
  • The coverage your chosen policy offers
Are there any discounts I can receive on my building insurance policy?

Yes – a no claim discount or bonus is usually offered by insurers who reward their customers for going a long period of time without making a claim. This discount can be worth up to 70% if you’ve gone five years or longer since you last made a claim. Insurers will also often establish introductory discounts to get you through the door, but these can lead to increased premiums once this period has ended.

Do I have to take out a building insurance policy if I’ve just bought a new house?

Yes – buying an insurance policy is usually mandatory if you’ve taken out a mortgage to purchase your home. This is to protect the lender in addition to you if the property is damaged.