You usually need to get home insurance before you move into your new home.
It is best to sort sooner – your lender often needs the certificate of currency before settlement.
You might not need home insurance if you are buying a strata property (e.g. an apartment or townhouse).
Do you need home insurance when you buy property?
Houses
In the majority of circumstances, yes, most lenders will require you to take out home insurance if you have a mortgage and buy a house.
In most cases, you'll need to make sure you have a policy in place before settlement occurs and you take ownership of the house. This is often because your lender will need the certificate of currency (proof of insurance) before you are responsible for the property. Some states, such as Queensland, require you to have cover when you and the seller sign contracts.
Apartments and townhouses
If you're buying a strata property, such as an apartment or townhouse, you don't need to take out building insurance – insurance should be included in your strata fees. Your conveyancer should be able to get proof of insurance for you.
Finder survey: Do people think home insurance is worth it?
Response
Female
Male
Yes
70.34%
66.17%
No
14.14%
22.37%
I don't know
15.52%
11.47%
Source: Finder survey by Pure Profile of 1113 Australians, December 2023
When you need to get home insurance: State by state
You typically become responsible for the house from 5pm the next business day after the date you sign the contract – this is before settlement.
New South Wales
You are responsible for damage from the settlement date. However, lenders will usually make sure you have cover in place before the settlement date.
Australian Capital Territory
You are responsible for any loss or damage to the property when you exchange contracts so the lender will require you to have home insurance in place by the contract date.
Victoria
You are responsible for damage from the settlement date. However, lenders may require you to have cover in place before the settlement date.
Tasmania
You become responsible for any damage to the property on the exchange of contracts so you need to have home insurance in place by the contract date.
South Australia
You're responsible for loss or damage to the house when you sign the contract – this is before settlement – so you'll need to have home insurance in place by the contract date.
Western Australia
You become responsible for the house either when you're given possession of the property or the date the whole of the purchase price is paid – whichever date comes first.
Northern Territory
You become responsible for the property either when you're given possession of it or the date you pay the whole of the purchase price – whichever date comes first.
What should your home insurance policy cover?
All home insurance policies cover you for most major weather events such as bushfires and storms. However, a small handful don't automatically cover floods. If you are moving to an area with a history or flooding, you probably want this.
Fires (including bushfires) e.g. an electrical fault sparks a fire which seriously damages your home.
Theft and attempted theft e.g. burglars break into your home and steal your belongings.
Storms and rainwater e.g. hailstones damage your roof, letting rainwater inside.
Malicious damage e.g. a vandal graffitis your home and puts dents in your garage door.
Escape of liquid e.g. a pipe bursts and causes water damage throughout your home.
Lightning e.g. a lightning strike punches a hole through your roof.
Explosion e.g. a gas leak causes an explosion and destroys your home.
Impact e.g. a tree falls onto your house, damaging the roof and walls.
Breakage of glass e.g. a stray cricket ball breaks your window or solar panel.
You might have to pay extra if you want:
Accidental damage. Usually an optional extra but sometimes included as standard. It covers mishaps such as a red wine spill or cracked TV screen.
Motor burnout. Also known as fusion damage insurance, it covers the repair or replacement of household appliances if the electric motor dies.
Flood cover. Insurers such as Budget Direct and Qantas don't automatically include this in their cover.
Specified items. If you have any high-value items, they might not be fully covered by a standard policy (most insurers have a cap of around $1,000). However, you can remove this cap with this add-on.
Personal contents. This covers your stuff while it's outside the home. So things like your handbag, backpack or phone.
Sum insured safeguard. If your sum insured ends up being less than the cost to repair, the insurer will increase your sum insured by a certain percentage.
We always do our best to avoid unnecessary jargon but there are a few terms and phrases that regularly pop up when looking for home insurance, so they're worth understanding.
A benefit that means your insurer will cover the total cost of replacing your home, even if it's higher than your sum insured amount.
Underinsurance
A common problem in Australia where people don't take out enough insurance.
Insured events
Specific events that your home insurance will cover, such as break-ins, falling trees and natural disasters.
Sum insured safeguard
If your sum insured ends up being less than the cost to repair, the insurer will increase your sum insured by a certain percentage.
Certificate of currency
A document that confirms an insurance policy is in place – usually required by the lender.
How much home insurance do you need?
Figuring out how much to insure your home for is arguably the most important part of taking out home insurance.
Calculate your sum insured
Your sum insured is the amount your home would cost to rebuild if it was totally destroyed. You usually need to calculate this amount yourself – calculators can help. Make sure that your home is insured for the minimum amount required by your lender. You can usually find this in the loan offer document or by calling your mortgage broker.
Consider a sum insured safeguard
Correctly calculating your sum insured is a pretty big onus to place on homeowners. For example, say you select a sum insured of $800,000 but it costs $1 million to rebuild your home – you would be $200,000 out of pocket. To prevent this, some insurers let you add a sum insured safeguard. This is a safety net that prevents big out-of-pocket expenses by providing up to an additional 30% of cover on top of your sum insured.
What's the best policy for first home buyers?
Just like buying a home, there's no one-size-fits-all for home insurance. While we can't say what's right for you, we can show you some policies we feel could be good depending on your situation. For more top picks, you can check out our best home insurance page.
These policies were chosen based on factors including price, features and unique inclusions. We looked at 17 home insurance brands and analysed over 30 benefits. Remember that there's no single "best" home insurance policy that suits everyone since everyone's needs and budgets differ.
Compare more home insurance policies here
Frequently asked questions
Home insurance is designed to cover the cost of repairs if your house is ever damaged or destroyed in an unexpected event. That could be a fallen tree, a bushfire, storm or if someone breaks in and steals all your stuff.
You pay a monthly or annual fee – known as a premium – and in exchange your insurance company promises to pick up the bill when something goes wrong.
It doesn't cover everything. For example, it doesn't pay for wear and tear and you'll need to pay an excess if you ever have to make a claim. This is the amount of money you have to contribute before the insurance company starts helping out. It's usually somewhere between a few hundred and a couple thousand dollars but most insurance brands let you set the excess yourself.
Asbestos is discovered in your home and extensive work is needed to safely remove it
❌ Mould
Mould damages your walls and furnishings
❌ Hydrostatic pressure
Water leaks into your home due to pressure on your pool walls
❌ Defects
There is a fault in the design of your home which means it is not safe or habitable
No but you typically need to take out home insurance as part of your home loan application. Most lenders require a certificate of currency (proof of insurance) before settlement.
Lenders can insist that you have home insurance. Most mortgage lenders require you to take out home insurance before your loan becomes unconditional. That way, you and your lender's investment is protected. For example, say the seller doesn't have insurance, it might be you who has to fork out for the damage.
The buyer is responsible for the property after either exchange of contracts (e.g. in SA, TAS, ACT and QLD) or at settlement (e.g. in NSW and VIC).
No. Lenders mortgage insurance doesn't cover you, it protects your lender. It's not related to home insurance.
Gary Ross Hunter was an editor at Finder, specialising in insurance. He’s been writing about life, travel, home, car, pet and health insurance for over 6 years and regularly appears as an insurance expert in publications including The Sydney Morning Herald, The Guardian and news.com.au. Gary holds a Kaplan Tier 2 General Advice General Insurance certification which meets the requirements of ASIC Regulatory Guide 146 (RG146). See full bio
Gary Ross's expertise
Gary Ross has written 648 Finder guides across topics including:
A home insurance calculator can give you a rough estimate on the value of your home and contents. But is that what you really want? Find out how to not underinsure or overinsure your home.
Motor burnout covers those big appliances in your home in the event that they let you down. This article will show you what it is, why it's important and how much it can cost you.
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