How Much is Home Insurance in Melbourne?

January 10, 2023
when to insure a house when buying

Key takeaways:

  • Home insurance policy cost varies based on the building’s value.
  • It is advisable to compare different insurers to pick the most suitable home and contents insurance policy.
  • You can reduce the home insurance cost by taking multiple insurances from the same agency.

Many buyers and even renters ask themselves, “how much is home insurance in Melbourne?” And the answer depends on where you are because the average home and contents insurance costs vary state by state in Australia.

Also, within the state, the insurance cost varies based on the home’s and contents’ worth. Additionally, different insurers charge different costs for properties in Melbourne. Therefore, there is no exact figure for the home and contents insurance costs.

So, read on to find out how much you can expect to fork out.

Different types of home insurance

Home insurance is a general term that covers three different types of insurance. These insurance are:

Home insurance (home or building insurance)

Home insurance covers your house building and all its parts, including the garages and garden shed, against the insured event. This insurance may include permanent fixtures such as an in-ground swimming pool, built-in dishwashers, air-conditioners, and fences.

Home and contents insurance

Home and contents insurance covers the house you live in and all your belongings and offers you fixed financial security in case of loss or damage caused due to the occurrence of insured events.

How Much is Home Insurance in Melbourne

Contents insurance

Belongings or contents insurance offers financial protection for personal possessions present in the house, including electrical appliances, furniture, clothing, etc.

It is advisable to thoroughly read the product disclosure statement of your insurance policy before taking one. What home and contents insurance covers vary from insurer to insurer. You can also check out the guidelines issued by the Australian Securities and Investment Commission for the insurers and the protections given to the consumer to know your legal rights per the home insurance.

The home insurance policy can be of two types, “total replacement” and “sum-insured” coverage. Sum-insured is the maximum amount of money your insurer is bound to give you in the event of damage or loss of your insured property based on the estimated rebuilding costs.

The total replacement home insurance covers repairing or rebuilding the home to the original standards. As the building sum is higher in the total replacement insurance, the sum insured is the most common type of home insurance policy given by the insurers.

What does home insurance cover?

The home insurance covers the loss and damage caused by the insured events. These insured events include fire, storm, rainwater, lightning, explosion, vandalism or malicious damage to the belongings or the property, burst pipes, breakage of sanitary fixtures, glass and ceramics, and tsunami or earthquake.

However, if you have a claims history, finding new home insurance may be a challenging task.

How Much is Home Insurance in Melbourne

Furthermore, it is noteworthy that home insurance does not apply to properties used for criminal or illegal purposes. Also, the home insurance policies in Melbourne, Victoria, do not cover the losses incurred due to bushfires within 72 hours of the onset of the fire.

How much does home insurance cost in Melbourne, Victoria?

Here, we have studied a couple of insurance quotes to have a rough idea of the insurance premium for home insurance costs.

We calculated the average home and contents insurance costs for the homes or buildings, the sum insured valued at around $500,000 to $1.2 million and the contents sum insured at around $50,000.

  • Average home insurance cost in Victoria: around $1,200 per year
  • Home and contents insurance cost in Victoria: around $1,400 per year
  • Average contents insurance cost in Victoria: around $350 per year

Remember that for rental properties in Melbourne, renters don’t need to pay for insurance. This is usually on the landlord.

Is accidental damage covered in the home insurance policy?

Typically, the home and contents insurance policy does cover accidental damage. Otherwise, the insurance agency will separately ask for the added payments for the replacement costs of accidental damages.

How can you reduce your home and contents insurance costs?

How Much is Home Insurance in Melbourne

Many first home buyers worry about the costs of insurance, and a tip is to read our article on how to buy a house in Melbourne with no deposit, which will help you save some money in the home buying process.

And fortunately, when it comes to home insurance, there are multiple tips to reduce the total costs. Here are a few significant ways that can help:

  • If you get multiple policies from the same insurer, the insurer may offer you a multi-policy holder discount. So, getting home, travel, car, and health insurance from the same insurance agency is preferable.
  • Choosing a higher excess insurance amount helps you get lower premiums. The excess amount in the insurance policy refers to the fixed amount you will pay when or if you make a claim. And your insurer will pay the rest of the amount required to cover the loss.
  • There is no need to remain stuck with the same insurer. If you find another insurance provider offering better financial protection, there is no harm in switching insurance agencies.
  • Introducing high-security measures to protect your home from burglars and thieves can also help you get lower premiums.

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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