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Home insurance for first-time buyers

Last updated on January 9, 2025 
Becoming a homeowner is a major life achievement. It’s also one of the most expensive purchases you’ll make. That’s why it’s important to have adequate home insurance in place so your asset is covered as soon as you own it.

Do I need home insurance before settlement?

Although it’s not a legal requirement, some lenders require you to have home insurance before settlement as a condition of your mortgage.

In NSW, VIC, WA and NT, you become responsible for the property on the day of settlement.

In QLD, TAS, SA and ACT, you may need to have insurance in place as soon as you exchange contracts.

What home insurance do I need as a first home buyer?

There are two main types of home insurance – building insurance and contents insurance.

Building insurance

Building insurance covers a home’s physical structures from loss or damage by an insured event. This includes the building itself, along with your garage, fences, paved driveways, and even fixtures like hot water systems and air conditioners. Learn more about building insurance.

What if I’m buying an apartment?

If you’ve bought into a complex that’s managed by strata, such as an apartment, it might already be covered by residential strata insurance (body corporate insurance) – your strata can help confirm what is covered and what falls under your responsibility.

Good to know: Allianz offers a 14-day cooling off period with its home insurance. This lets you cancel your policy within 14 days of purchase, as long as you haven’t made a claim and don’t need to make one.

Contents insurance

Contents insurance covers the contents of your home from loss or damage by insured events. This includes your furniture and carpets, window coverings, electrical appliances, your barbeque, tools and even your clothes and shoes. Learn more about contents insurance.

Want building and contents cover for your new home? Allianz also offers combined home and contents insurance cover.

How much home insurance do I need?

When you take out home insurance, you need to decide how much to insure your home for. This amount is known as the sum insured. A home insurance calculator can help you estimate the replacement cost of your home and contents.

Make sure the amount you’re insured for reflects the actual cost to rebuild your home and replace the contents. When a policy doesn’t fully cover the cost of rebuilding or replacing your home and contents, you might be underinsured – meaning you’ll need to cover any shortfall yourself.

According to the Insurance Council of Australia, underinsurance is common in Australia, so it’s important to get this right.

Good to know: The replacement value of your buildings is not the same as the market value – you don’t need to include the value of the land when calculating the buildings replacement value.

Calculating your contents

When determining how much contents cover you need, include all your contents such as:
 

  • Carpets and rugs
  • Furniture
  • Art
  • Household electrical appliances
  • Blinds, curtains and window coverings
  • Clothing and accessories
  • Gardening tools
  • Potted plants

Retaining proof of purchase (i.e. receipts) and taking photos of items will also help you calculate the cost of your contents.

What else should be considered with home insurance?

Choosing a home insurance policy that suits your needs will help you get the most out of it. There are many areas to consider when choosing cover – this may include:
 

  • Understanding the risk of natural disasters in your location. If your home is in an area that’s prone to natural disasters such as floods, bushfires or cyclones it’s wise to check if the insurance policy will cover you for these events, if there are any exclusion periods, and that the premium is within your budget.
  • Considering optional cover. Optional covers allow you to upgrade your cover for an additional premium. Examples include portable contents cover (cover for items that you wear or carry outside your home), accidental damage and motor burnout.
  • Looking for offers. Many insurers offer discounts on combined policies. For example, Allianz offers a 10% discount when you take out a combined Building and Contents Home Insurance policy1.2. 
  • Conducting a policy health check. It’s a good idea to regularly review your insurance cover with an annual policy health check – free of charge if you’re with Allianz. It’s a simple check-in to make sure your details, excess, cover and payment frequency are still appropriate for your circumstances.
  • Investing in home maintenance and upgrades. Upgrading your security system or making your home more resilient to natural disasters can decrease your chances of making a claim.  Trimming trees, using non-combustible building materials, and having electrical wiring moved higher to reduce issues during flooding, are just some of the ways you can help look after your home and contents. When you move in, it's also a good idea to check the flexi-hoses. It's recommended to replace them every five years to prevent deterioration.

Frequently asked questions

It’s not a compulsory legal requirement but lenders typically require you to have house insurance before you settle your home loan. Check with your lender to find out exactly what’s required.
If you're buying a strata property, such as an apartment or townhouse, you typically don't need to take out building insurance. Insurance for the building should be included in your strata fees. However, you may still want contents insurance to cover your belongings. You should check with your strata to find out what’s your responsibility.
No. Lenders mortgage insurance covers your lender. It doesn't cover you as a homeowner and is not related to home insurance.

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Disclaimer

This article has been prepared by Allianz Australia Insurance Limited ABN 15 000 122 850 AFSL234708 ("Allianz"). In some cases, information has been provided to us by third parties and while that information is believed to be accurate and reliable, its accuracy is not guaranteed in any way.

Any opinions expressed constitute our views at the time of issue and are subject to change. Neither Allianz, nor its employees or directors give any warranty of accuracy or accept responsibility for any loss or liability incurred by you in respect of any error, omission or misrepresentation in this article.

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*Conditions apply
Combined Discounts
  1. A discount of up to 10% is applied to your premium when you combine Buildings and Contents on one Home Insurance policy, including for the optional covers (if selected): Motor burnout and Accidental damage cover. The combined discount doesn't apply to any flood component of the premium (where covered) or to the optional cover’s Portable contents and Domestic workers’ compensation (if available and selected). Minimum premiums may apply.

  2. Where discounts are applied, your premium is subject to rounding. If more than one discount applies, they’ re applied in a predetermined order, so the later discounts apply to the amount already reduced by the earlier discounts instead of the total amount. Discounts do not apply to government taxes and charges. Discounts won’t apply below the minimum amount payable for the policy.

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Any advice here does not take into account your individual objectives, financial situation or needs. Terms, conditions, limits, and exclusions apply. Before making a decision about this insurance, consider the relevant Product Disclosure Statement (PDS)/Policy Wording and Supplementary PDS (if applicable). Where applicable, the PDS/Policy Wording, Supplementary PDS and Target Market Determination (TMD) for this insurance are available on this website. We do not provide any form of advice if you call us to enquire about or purchase a product.

Allianz Australia Insurance Limited ABN 15 000 122 850 AFS Licence No. 234708 is the insurer of any general insurance products offered, and Allianz Australia Life Insurance Limited ABN 27 076 033 782 AFS Licence No. 296559 is the insurer of any life insurance products offered. Each entity is responsible for any statements and representations made about its products, on this website.