If you want to protect your home and possessions against damage or theft, home and contents insurance is very important.
Home insurance is only for homeowners and is generally required by mortgage brokers, whereas contents insurance is for owners and renters.
Campbell Fuller, spokesperson for the Insurance Council of Australia, explains the difference.
"Contents insurance covers what's inside the property so it covers the financial cost of repairing personal possessions and furnishing - that can be furniture, curtains, white goods, music equipment, televisions, computers, clothing, jewellery, sporting equipment and even children's toys. Home insurance cover the building itself, so damages to the home or the apartment."
If you rent, your landlord should have a home insurance policy, but it doesnt cover what you own.
Its your responsibility to get contents insurance.
The first thing to do before to look for an insurance policy is to go through your possessions.
Tom Godfrey, spokesperson for consumer advocacy group Choice, recommends to list everything you own and the cost of replacing each item.
The premium is the amount you'll pay the insurer for your policy.
Your insurer takes into account many factors when calculating it like your age, the location of your home and the contents you wish to insure.
The amount of excess you're ready to pay also has an impact on the premium.
Once you pick your policy, the insurer will rely on you to give accurate information.
Make sure you have records of everything you own by keeping receipts and taking photos of the items.
Campbell Fuller says that giving wrong information, even if it's only a mistake, could cause you trouble when you have to make a claim.
He also insists that its important to make sure you dont underestimate how much you own and that you update your policy every year.
When youre doing that check-up every year, also have a look around and compare prices.
Tom Godfrey says that the best offers are often for new customers.
Every policy is different.
Some covers accidental damage while some do not.
Some will cover a piece of jewellery up to five hundred dollars, but you might have an expensive ring that needs additional cover.
If you need more information about contents insurance, check out the websites choice dot com dot a-u and understanding insurance dot come dot a-u, where you can find buying guides, contents calculator and insurer comparators.
Useful links:
Understand Insurance, an initiative of the Insurance Council of Australia www.understandinsurance.com.au
Contents calculator and household inventory checklist www.understandinsurance.com.au/calculators
Find an insurer (insurer comparator) www.findaninsurer.com.au
Information about home and contents insurance by Choice www.choice.com.au/money/insurance/home-and-contents
