A Guide to Insuring for First-Home Buyers

September 1, 2021

There’s nothing like the feeling of getting your first home. A space that’s all yours—one that you’ve worked hard to acquire is one of life’s biggest rewards. But before making an offer, there are a few other things you might want to prepare, namely insurance. 

You can get multiple types of insurance in a lifetime, one of which will be on your property. Why you have to think about this now is to start protecting one of the most valuable assets you own.

Think of insurance like a band-aid:

You have it around in case something bad happens. You only need it temporarily. But you hope to never use it.

We rest easier at night knowing we’re taken care when accidents surprise us out of nowhere. So before you choose what to get cover for, let’s walk you through all questions you might have. 

Where and when should I start?

You should start looking into insurance once you are seriously considering the home you want to purchase. Legally, you own the home once you’ve signed for it, so in the period between signing the contract and moving into it, you need to have it insured. 

Why? Let’s just say if something happens, like a fire or a flood —in the period mentioned above—the damages are your responsibility. Also, if you’re getting external financing for your home, they’ll usually require that you secure an insurance policy first. If you haven’t done so by the contract signing date, your lender may be forced to organise this for you. And they might not choose the most cost-effective option. What this means is more money out of your pocket. 

Now that we’ve covered when you should start, let’s figure out where.

This is the time to shop around and look at different quotes from different providers. Take your time comparing and contrasting the policies and what they cover you for (more on this below). 

What kind of home insurance should I get?

  • Building/Home Insurance: this is essential if you own a free-standing house or a building. If your home is in a strata property, then the strata plan should cover the building insurance. Check with your building manager to confirm this. The insurance also covers fixtures in the home—think your garage, fences, driveways and the house itself. 
  • Contents Insurance: this will cover all your personal belongings like carpeting, electronic appliances and furniture. 
  • Home & Contents Insurance: this covers both of the above. These policies are usually sold together at a discounted rate. Read more on what it covers here.

So if you’re living in a home and you own the building, then you’ll need both home and contents. But if you’re in a strata property, you might just want to get contents insurance.

How much insurance do I need?

You don’t want to be underinsured and have to pay the difference between your insurance payouts and the actual cost of repairing or replacing something in your home. So the easy way to look at it is to make sure your insurance matches what it would take to replace anything, as well as some extra costs and expenses. 

Here’s what we mean by extra costs and expenses. Let’s say your home is flooded and you have to vacate the premises. Perhaps your insurer will cover the costs of the repair, but there will definitely be other expenses like finding temporary accommodation while it’s being worked on. 

So this is a general guideline to how you can calculate the insurance you need:

  • Insurance needed for a building: this will vary (and probably increase) over time as building codes change. You can use a calculator for this. The land isn’t included in this calculation.
  • Insurance needed for contents: add up the costs of your personal belongings according to what you would have to pay for them today, and not what you purchased them for. Include your clothes, your rugs and even the food and nice bottles of vino in your fridge. 

What am I covered for?

Coverage will depend on your insurer but the standard “insured events” are:

  • Fires
  • Theft and burglaries 
  • Environmental disturbances like storms and earthquakes
  • Explosions
  • Impact damages (ie: if a tree were to fall on the home)
  • Flooding (ie: from a burst pipe)
  • Vandalism 

The insurers however, will not cover you if any of the damages or losses are intentional. Rarely also do they cover damage made from pest infestation, and wear and tear. 

If you have any particular needs, check with your insurers. You may be able to get extra coverage on incidents you’re more concerned about, as well as things like moving house, and the potential temporary accommodation we talked about earlier. 

Also beware of how your insurance is impacted if you go on vacation. Sometimes leaving the property for an extended period of time may change the coverage. 

What do insurers need to know about?

When you’re getting quotes, the information needs to be as accurate as possible to avoid any issues down the line if you’re making a claim. Here are a few questions that your insurer will probably ask you. If you’re not sure, get in touch with your property agent or a solicitor. 

  • When was your home built?
  • What is the verified size of the property? (Home and land.)
  • Is it a heritage property?
  • What kind of property is it? (Free standing, semi-detached etc). 
  • What are the walls made of? (Weatherboard, aluminium, concrete etc.)
  • What’s the roof made of?
  • Does it have any security features? (Have a look at the deadlocks, windows, alarms, smoke detectors etc.)
  • If you had to rebuild the home today, what would it cost? (Including fittings, fixtures, fencing etc.)

Hopefully we’ve helped you through the nitty gritty of home insurance. Just remember that it’s a time to be celebrating, and a little attention given to the paperwork and research goes a long way! 

If you’re just starting to look for a home to buy, set up your match profile with preferences and we’ll share new matching properties with you as they get listed. So you don’t miss a beat.

Soho is your expert team in Australian real estate, offering an innovative platform for effortless property searches. With deep insights into buying, renting, and market trends, we guide you to make informed decisions, whether it's your first home or exploring new suburbs.
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Our AI match engine will match you with over 150,000+ properties and you can swipe away or shortlist easily. Making your home buying journey faster and easier.