While it may feel like you are handing over money for no reason, this insurance protects your most valuable asset.

For most people your home is the most expensive thing you will ever buy, and insurance gives you protection for damage or loss caused by events such as storms, fires, and theft. Your insurance will cover the cost of replacement or repair of your home. While we all hope that we don’t actually need to use it, unfortunately you might.

When you have a mortgage for your property it is a requirement that you hold an appropriate amount of home insurance. Generally, your insurance certificate will have to be provided before the loan will settle and within the loan documents that you sign it stipulates that this must be held for the duration of the loan.

What if I don’t have it?

If your home is damaged and it’s not covered by insurance, you will have to pay for the costs of rebuilding or repairing your home out of your own pocket. If your home is damaged or destroyed, you still owe the bank the money you borrowed and you still have to pay it back. 

The reality is most people could not afford to repay their current mortgage as well as pay to rebuild their home.

Do I Need THAT Much Insurance? – My house didn’t cost that much.

Your building insurance needs to be enough to cover the rebuilding of your home including extras you may have had like air conditioning, or sheds. It also needs to cover the cost of demolition and removal of the destroyed building. These amounts could be higher than you realise. A simple way to check if your policy has you covered is to use this calculator https://sumsure.cordell.com.au/#/products/7/profiles/112

The Australian insurance market is highly competitive and offers a wide range of products for most consumers. These products have various levels of cover, product inclusions, and exclusions to meet most needs, and there are many ways you can manage the cost of the premium.