The below is intended for general informational purposes only. You should receive independent financial and legal advice when considering insurance.
Whether you are buying a house to settle down and raise a family in or buying a house as an investment property, it is important to have the right insurance to protect one of your most precious assets.
For first time homeowners, choosing an insurance policy can be quite daunting. With so many different types of home insurance out there, here are a few facts that can help you make the right choice.
Generally speaking, there are 3 main types of home insurance available in Australia. These 3 categories are Home and Contents, Building, and Content Insurance. As the name would suggest, Home and Contents Insurance provides coverage for your house and your valuables inside the house. Building Insurance on the other hand only provides protection for the house and Content Insurance provides protection for your valuables inside the house.
While most insurance providers will provide you with the 3 main options, their policies might differ from one another. Some companies provide protection for when your household items are in transit out of the house for an added premium fee, while some providers offer temporary shelter if your house is declared unsafe to stay in.
The right provider for you will depend on your budget, the extension of the coverage you need and the type of home you own.
Besides the three main home insurances’ available in Perth, there are also other policies that you should be considering. While they are not often referred to as ‘Home Insurance’, they can still offer you coverage for your house.
Here are some of the additional policies you should consider:
Fire Insurance: If you are located in a bushfire risk area, it might be smart to purchase Fire Insurance. Fire Insurance doesn’t just protect you from bushfires, it also provides protection from household-related fire incidents like a malfunctioning home electrical appliance.
Flood Insurance: Water, whether caused by a flooding river, burst water pipe or storm, can cause extensive damage to your home, contents and other assets. With severe weather warnings becoming more prevalent, flood insurance should be on your list of potential insurances to take out if you live near any body of water.
Storm Damage: Some policies do not provide protection from natural disasters as standard. If a major storm hits, damage from hail, lightning and heavy winds can take a big toll on your property. If your windows or roof are damaged by one of these natural incidents, you will be thankful that you had taken out storm damage cover.
Landlord Insurance: If you are considering renting your house or rooms, Landlord Insurance will protect you from any damage done by your tenant.
Tenant/Renter’s Insurance: This policy will protect tenants from fire and theft as well as coverage for their things inside the rented home.
Before you start shopping around, make a note of all the important information about your house. You need to know how much your house costs, how much the contents cost and what type of build it is. This information is typically provided by your agent when making a house purchase.
You then need to decide how much coverage you need and how much you are willing to pay. Once you have all the information you need, take your time to shop around.
Every major purchase is important but it’s far more important to have peace of mind knowing that you and your home are fully protected in case of an emergency. Take your time to compare insurance policies from different providers and don’t be afraid to ask questions.
With everything involved with purchasing your first home, the different types of insurance that you need to consider as a first home buyer can be confusing, overwhelming and more importantly, an additional cost to consider. Thankfully, the First Home Owner’s Grant in WA can help alleviate those additional costs. Want to find out if you qualify for the First Home Owner’s Grant? Click here to find out.