How much should you be paying on your home insurance?

Houses come in all shapes and sizes and so do the insurance options for covering them. The way we live and work in the home constantly changes, and with so many extras to choose from, you may feel uncertain about where to start.

Here are a few things to think about when you’re determining the sum for which you want to insure your house. 

Understanding sum-insured cover

The ‘sum insured’ for your policy is the maximum amount you can claim for any one incident. It should be enough to replace your home and its contents if they’re damaged or destroyed.

For example, if your home is insured for $500,000 and your contents total $100,000, your sum insured for a home and contents policy would be $600,000. Remember, the building sum insured amount is not the price you paid for the property, or what the market value is – it’s your estimate of the cost to rebuild. If your rebuild costs more than the sum insured, you may have to make up any shortfall. Similarly, it’s up to you to ensure your contents are covered for their full replacement value. To ensure your sum insured is appropriate, regularly assess both your home and contents insurance values to make sure you aren’t in danger of being underinsured.

Calculating home building costs 

Two common ways to work out how much it would cost to rebuild your home are cost-per-square-metre and elemental estimating.

The cost-per-square-metre calculation takes very basic information – such as the size of your home – and provides a rough estimate for rebuilding a house of that size. While it’s a quick way to estimate your level of insurance, it can be inaccurate in terms of actual replacement costs.

The elemental estimating method provides a much more detailed assessment of your asset as it considers things like: 

  • period of construction (eg Victorian, Federation or contemporary) 
  • size (including total area and floors)
  • construction quality (eg quality or prestigious) and materials used, and
  • other features such as bathrooms, garages, balconies, lighting, heating and security systems.

It’s important to consider the true cost of rebuilding your home –construction and wage costs may have changed dramatically since it was first built.

Need a quicker way to estimate the total value of your home and contents? We’ve created a Building Calculator to help you.

Calculate The Replacement Value Of Your Home

Calculating contents costs

It’s imporant to accurately assess what you own and determine how much it would take to replace it. For example, the average value of an Australian household’s home contents is estimated at $61,000 – including everything from jewellery and appliances, through to furniture and works of art. 

While the bigger ticket things such as appliances and valuables may be easier to assess, it’s also important to consider the value of your everyday items including crockery, cutlery, clothing and bed linen. These can add up if they’re damaged and you need to replace them all at once.  

Accurately estimating what you own can be tricky. A few simple tricks to help you include: 

  • Go room by room and catalogue your valuables.
  • Regularly update your list.
  • Take photos of your valuable items. 
  • Keep receipts where needed.

The more thorough your contents record keeping is, the more accurate your sum insured will be. This can help speed up the process should you need to make a claim. 

Safety net home protection

If your home is destroyed or badly damaged, there’s no guarantee that the sum-insured amount will be enough to cover the costs of rebuilding it or replacing its contents. Some premium levels of insurance will offer you a safety net above the sum-insured amount in the event your estimate doesn’t quite cover all costs. 

GIO’S highest level of coverage is designed to protect your home and contents against various forms of events, from bushfire damage and floods to theft and vandalism. Along with the highest level of cover for loss or damage for insured events, our Platinum Home and Contents level of cover will also pay up to a further 30% of your home sum-insured amount to: 

  • repair damage
  • replace your home, or
  • pay you the amount quoted by a member of our builder supplier network to repair or replace the home.

If you want to be certain you’re covered should the worst happen, choosing insurance with a safety net home protection can offer that extra peace of mind. 

Understanding additional covers that come with your policy and optional covers that you can pay extra for

Choosing the right cover for you can take considerable time and research. To help target your search, check what’s included in your policy when you take it out, including optional covers and automatic limit amounts.

Temporary accommodation

If your home is damaged, you’ll probably need to find alternate accommodation until it’s back to a liveable condition. In some cases that could take months.

GIO’s Platinum Home & Contents Insurance can cover the costs of temporary accommodation for up to 24 months (up to 10% of your sum-insured amount), while your home is being repaired. Under this level of cover, we’ll also pay for your pet’s accommodation should they need a temporary home, for as long as you’re waiting for your home to be rebuilt.

Home improvements

Any environmental improvements you add to your home, such as solar heating systems, rainwater tanks or compost equipment, may be covered under certain circumstances. To be eligible, the damage bill of your approved claim will exceed 80% of your home sum-insured. For example, if you’re a Platinum Home & Contents Insurance policyholder, you’re covered up to $5,000 for environmental updates, if we’ve authorised the works and the features are new to your home. 

GIO’s Platinum Home & Contents Insurance also covers home modifications needed due to injuries sustained during an insured event (eg paraplegia or quadriplegia), along with any unforeseen updates required to comply with the latest home building regulations.

Flexible extras

GIO’s Platinum Home & Contents Insurance offers a range of optional covers, including cover for pet injuries. It also allows you to increase cover for your precious items and valuables, meaning you can increase your set fixed limit and make sure you’re properly reimbursed if something special is lost or damaged.

Choosing the right cover

While all levels of insurance offer some peace of mind, something as important as your home and valuables deserve the best coverage possible.

With GIO’s Platinum Home and Contents Insurance, you can rest easy knowing you have the highest cover for loss or damage for insured events, accidental loss or damage at home.

Discover GIO’s Platinum Home And Contents Insurance


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Insurance issued by AAI Limited ABN 48 005 297 807 trading as GIO. Consider the Product Disclosure Statement before making a decision about this insurance. This advice has been prepared without taking into account your particular objectives, financial situations or needs, so you should consider whether it is appropriate for you before acting on it.