Home insurance for first-time buyers
If you’ve just bought your first house, you might well be wondering how home and contents insurance works and what it can cover you for, as well as the options when it comes to home insurance for first-time buyers.

If you’ve just bought your first house, you might well be wondering how home and contents insurance works and what it can cover you for, as well as the options when it comes to home insurance for first-time buyers.
KEY POINTS
- Home insurance covers you for the costs of repairing or rebuilding if your home is damaged.
- Banks and lenders will typically require home buyers to have it as a condition of their mortgage.
- Home insurance protects the structure of your home, and contents insurance protects your possessions.
- The two are sold separately, but are commonly packaged up as home & contents insurance.
Purchasing your first home can be exhilarating, but you’ll need to take care of a good deal of admin and paperwork as part of the purchasing process. A major one of these is making sure you have appropriate insurance to protect your new home, as well as your belongings inside – in fact, home insurance may well be a requirement of your mortgage. So how exactly does home insurance for first-time buyers work, and what’s covered?
What is home insurance?
Generally speaking, there are two types of insurance available for your house – home insurance and contents insurance. Home insurance, otherwise known as building insurance, covers damage to the structure of the house itself, including permanent fixtures and fittings. Contents insurance, on the other hand, covers your belongings in the event of loss, theft or damage.
While these are two separate types of insurance and can be purchased individually, they are commonly bundled up and sold together as a single package under the names ‘home and contents insurance’ or ‘building and contents insurance’.
Bundling these two types of insurance up in this way rather than taking them out separately can have a number of benefits. It can be more convenient, meaning you have one policy to manage instead of two, and depending on the provider you choose, it may also be cheaper than taking out two individual insurance policies.
Where can you get home insurance for first-time buyers?
Most major financial institutions in Australia offer home and contents insurance. There are many options on the market, so it is generally a good idea to compare home and contents insurance to find a deal that suits your particular needs. If you are a first home buyer, then it is quite possible that your real estate agent might be partnered with a home and contents insurer – they might recommend this insurer to you, or even offer you a sign-up deal as an incentive. If they do, be sure to do your research to understand whether the policy suits your coverage needs and offers a competitive price compared to others in the market.
What does home insurance cover?
Home insurance is designed to cover the cost of repairs to – or replacement of – your house if it is damaged or destroyed by an insured event. It can cover both the exterior and structure of the home, as well as the fittings and fixtures inside, such as built-in wardrobes, cabinetry and plumbing, depending on the type of policy you have.
In addition to the house itself, home insurance typically covers other structures such as garages and any other lockable buildings on your property. The full extent of what is covered will depend on your policy and insurer.
Generally speaking, there are two different types of home insurance you can purchase – total replacement cover or sum insured cover. The major difference between these two types is the amount that you are covered for in the event of damage to your home.
If you have a total replacement policy, then you are covered for all the costs necessary to rebuild it to its original standard, provided that the damage was done by an insured event, which will be explained in the product disclosure statement of your insurance policy.
If you have a sum insured policy, then this means that you are covered up to a set amount for repairs to your home. A sum insured policy tends to have lower premiums than a total replacement one, because the potential payout for a total replacement policy can be greater.
Compare home and contents insurance
What is an insured event?
An insured event is an accidental, unexpected or unforeseen event that is covered by your home insurance. In general terms, insured events can include such things as storm, flood, fire, lightning and earthquake damage, and damage caused by other people’s malicious acts such as vandalism and thefts or attempted thefts that have been reported to police.
According to CommInsure, the three most common types of home insurance claims are for loss and damage caused by fire, storms, and sudden escape of liquid from such things as pools, water tanks, washing machines and dishwashers.
The exact definition of an insured event will vary depending on the insurer and the policy you choose, and it is very important to be wary of any exclusions and conditions there may be, to find out exactly what you’re covered for.
What exclusions does home insurance have?
When you take out home insurance, it is important to understand that not all possible events and circumstances will be covered, and there are likely to be certain exclusions. Although these will vary between insurers, there are some that are likely to be common to most insurance policies.
Most major insurers concur that if you fail to take reasonable steps to secure your home against break-ins, your claim might be refused. Damage caused by deliberate, malicious or unlawful acts by you, your family members, your guests or your tenants are also unlikely to be covered, although in the latter case you may be able to take out a specialised landlord insurance policy to cover you for this risk.
You are unlikely to be covered for damage done during renovations or faulty workmanship, or any pre-existing damage to the home. Loss and damage caused by vermin and household pets is also typically excluded under most home and contents insurance policies.
If flood damage is a priority for you, then it is advisable to ask your insurer exactly what your policy covers you for. Some policies will only cover you for flood damage as an optional extra, or for certain types of flood damage. If your new home is in a flood-prone area and you are concerned about what might and might not be covered, it is advisable to check with your insurer. You may also want to consider seeking professional financial advice if you need help choosing a policy.
If you wish to read about this topic in more detail, consider Canstar’s list of common home and contents insurance exclusions.
What is contents insurance?
Contents insurance is a kind of insurance that covers you in the event that your personal possessions are damaged, stolen or lost. Possessions can include anything from your furniture and carpets, to TVs and video game consoles, to a pair of sunglasses. Note that while many household items are automatically covered by contents insurance, you may need to list particularly expensive items such as jewellery and artworks.
There are varying levels of cover for contents insurance, but in general terms, contents insurance will cover your possessions if they are damaged, lost or destroyed by a defined event. Depending on the kind of policy you have, these events can include such things as burglary, fire, storms and vandalism.
Contents insurance generally covers possessions that you usually keep inside your home. If you want cover for portable valuables such as laptops or jewellery, this may be included as part of a contents insurance policy, or available for purchase as either an optional extra or under a standalone policy.
Is home insurance worth it?
Home and contents insurance is typically not mandatory in Australia, however, if you’re purchasing a home with a mortgage, then it’s very likely that your lender will require you to take it out as a condition of the home loan. It’s likely that you’ll be required to show proof that you have an appropriate level of home insurance before your purchase settles.
In any case, a home is a valuable asset, and if it’s damaged by an event like a fire or flood, repairs and rebuilding can be costly, and potentially out of reach without insurance cover. The Queensland Government warns that “not having home insurance is very risky”, so in any situation, you should think carefully before deciding to proceed without it.
Compare Home and Contents Insurance with Canstar
If you’re comparing home and contents insurance policies, the comparison table below displays some of the policies currently available on Canstar’s database for an Australian aged under 50, seeking cover in NSW or the ACT for a cost to replace contents of below $75,000. Please note the table is sorted by Star Rating (highest to lowest), followed by provider name (alphabetical) and features links direct to the providers’ websites. Consider the Product Disclosure Statement (PDS) and Target Market Determination (TMD), before making a purchase decision. Contact the product issuer directly for a copy of the PDS and TMD. Use Canstar’s home insurance comparison selector to view a wider range of policies. Canstar may earn a fee for referrals.
Products displayed above that are not “Sponsored or Promoted” are sorted by Star Rating and then alphabetically by company. Canstar may receive a fee for referral of leads from these products. See How We Get Paid for further information. If you decide to apply for Home Insurance or Contents Insurance, you will deal directly with an insurance provider, and not with Canstar.
Consider the provider’s detailed product and pricing information before making a decision to purchase a policy. The products displayed on this page do not include all providers and may not compare all features relevant to you. View the Home Insurance Methodology and Report. The Star Rating shown is only one factor to take into account when considering products.
How does contents insurance work?
Generally speaking, there are two types of contents insurance policies available – those that cover the value of your belongings up to a certain dollar amount on a ‘sum insured’ basis, and those that offer new-for-old replacement of your belongings. The premiums for a new-for-old replacement policy tend to be higher, as the cost of replacing your items could be higher than if your insurer paid a set amount.
If you are considering taking out contents insurance, it is worth considering the value of your possessions, so you can decide on an appropriate amount of coverage to take out, and so you will be able to replace them if they are lost or damaged. This is especially important if you opt for a sum-insured contents insurance policy that covers the value of your belongings.
Your contents insurance premiums will be determined by the level of cover you choose, and may be influenced by other factors such as the amount that you choose to be insured for, any optional extras you choose to include, the location of your home and any specific risks that may be associated with this location, such as a heightened risk of flooding or bushfires.
What exclusions does contents insurance have?
Much like home insurance, contents insurance generally does not cover your possessions for damage caused by deliberate, malicious or unlawful acts by you, your family members, your guests or tenants. You are likewise not covered if your belongings are lawfully seized by police, or some other person with legal authority to do so, or for items that you illegally have in your possession.
In addition, contents insurance typically does not cover you for standard wear and tear on your belongings, nor for any losses resulting from a failure to take care of your contents properly, or possessions that you have merely lost, with no identifiable insured event to blame.
If you wish to read about this topic in more detail and what may be excluded, Canstar’s list of common home and contents insurance exclusions may assist you.
How does home insurance work for apartments or townhouses?
Generally speaking, if you buy an apartment, you will not need to take out separate home insurance, as the building will be covered by residential strata insurance that you will pay for as part of your body corporate fees or building levies. Most apartments and townhouses in Australia are covered in this way, so you will need to check with whatever entity manages your building to make sure this is the case for you.
It is worth noting that strata insurance may not cover you for certain fittings and fixtures inside your new apartment or townhouse, such as cupboards and light fittings, and it also generally doesn’t cover your own personal possessions inside the apartment. It is therefore important to find out if you are covered for these things, and if not, you may wish to seek out a contents insurance policy that can cover you for fittings and fixtures.
Canstar may earn a fee for referrals from its website tables, and from Sponsorship or Promotion of certain products. Fees payable by product providers for referrals and Sponsorship or Promotion may vary between providers, website position, and revenue model. Sponsorship or Promotion fees may be higher than referral fees. Sponsored or Promotion products are clearly disclosed as such on website pages. They may appear in a number of areas of the website such as in comparison tables, on hub pages and in articles. Sponsored or Promotion products may be displayed in a fixed position in a table, regardless of the product’s rating, price or other attributes. The table position of a Sponsored or Promoted product does not indicate any ranking or rating by Canstar. For more information please see How We Get Paid.
Cover image source: Ivanko80/Shutterstock.com
This article was reviewed by our Editor-in-Chief Nina Rinella before it was updated, as part of our fact-checking process.

Alasdair Duncan is Canstar's Content Editor, specialising in home loans, property and lifestyle topics. He has written more than 500 articles for Canstar and his work is widely referenced by other publishers and media outlets, including Yahoo Finance, The New Daily, The Motley Fool and Sky News. He has featured as a guest author for property website homely.com.au.
In his more than 15 years working in the media, Alasdair has written for a broad range of publications. Before joining Canstar, he was a News Editor at Pedestrian.TV, part of Australia’s leading youth media group. His work has also appeared on ABC News, Junkee, Rolling Stone, Kotaku, the Sydney Star Observer and The Brag. He has a Bachelor of Laws (Honours) and a Bachelor of Arts with a major in Journalism from the University of Queensland.
When he is not writing about finance for Canstar, Alasdair can probably be found at the beach with his two dogs or listening to podcasts about pop music. You can follow Alasdair on LinkedIn.
- What is home insurance?
- Where can you get home insurance for first-time buyers?
- What does home insurance cover?
- What is an insured event?
- What exclusions does home insurance have?
- What is contents insurance?
- Is home insurance worth it?
- How does contents insurance work?
- What exclusions does contents insurance have?
- How does home insurance work for apartments or townhouses?
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