Preparing financially
Insurance you need as a homeowner
Building, contents and mortgage protection insurance — what each actually covers, and how they differ from income protection.
- Building insurance is typically required from settlement, or provided via the owners corporation for apartments — confirm exactly what it covers.
- Contents insurance is separate and optional, covering possessions, not the building.
- Mortgage protection insurance is narrower and loan-specific compared with income protection.
- Underinsuring for rebuild cost (not market price) is a common, costly mistake.
Building insurance
Most lenders require building insurance in place from settlement for a house or townhouse — covering the structure against damage. For an apartment or unit in an owners corporation, the building is typically insured through the owners corporation's policy (see the ownership-costs guide), but confirm exactly what that covers rather than assuming it matches a standalone policy.
Contents insurance
Contents insurance is separate and optional, covering your possessions rather than the building itself — worth budgeting for given the replacement value of most households' belongings, and worth reviewing periodically as what you own changes.
Mortgage protection insurance
Mortgage protection insurance specifically covers loan repayments if you can't work — a narrower, loan-specific product compared with broader income protection insurance (see the income-interruption guide). Compare the two rather than assuming they're the same thing.
Practical checklist
Before and at settlement
- Arrange building insurance to start from settlement (for houses/townhouses)
- Confirm exactly what an owners corporation's building policy covers, for apartments
- Get a contents insurance quote based on actual replacement value
- Compare mortgage protection against income protection for your situation
Questions for a professional
- What rebuild cost should I insure this property for?
- What does the owners corporation's building policy actually cover?