How much should you insure your house for?

Houses come in all shapes and sizes, as do the insurance options for covering them. But how do you make sure the amount you choose to cover your home and contents will be enough if you need to claim? Here are a few things to consider when choosing the sum insured for your home and contents.

What is a sum insured?

The ‘sum insured’ listed on your policy is the maximum amount that your insurer will pay for any one insured event. The building sum insured should be enough to rebuild your entire home (including sheds, patios, fencing and driveways), and your contents sum insured should cover the full replacement value of your belongings (including carpets and window coverings).

According to the Insurance Council of Australia, many Australian homes are underinsured.1 This means that the rebuild costs are higher than what the home is insured for, leaving homeowners to pay the difference at claim time.

One of the most effective ways to avoid underinsurance is to accurately track and calculate the replacement cost of your home and its contents.

How to avoid underinsurance

Calculate home building costs accurately

Two common ways of evaluating home rebuild costs include:

  • the cost-per-square-metre method, and
  • elemental estimating.

The cost-per-square-metre calculation estimates an average cost per square metre to rebuild your home. While it’s a quick way to estimate your level of insurance needed, it may not accurately reflect the actual replacement costs.

The elemental estimating method offers a much more detailed assessment of your home and belongings, considering additional factors such as:

  • construction period (e.g. Victorian, Federation or contemporary)
  • construction quality and materials used (e.g. high-quality or prestigious), and
  • additional features including bathrooms, garages, balconies, lighting, heating and security systems.

We know that starting the process of assessing your home can be overwhelming. That’s why we've created an easy-to-use Building Calculator to help you estimate your home rebuild costs.

You may also benefit from consulting with a professional builder or an architect who has experience in valuing homes.

Use Building Calculator

Consider Safety Net Home Protection

Even if your home sum insured is up to date, costs can unexpectedly spike if there is a shortage of materials or a rush on building services following a natural disaster. To help with these additional unexpected costs, GIO offers a safety net in addition to the home sum insured amount.

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

  • repair or replace your home, or
  • pay you what it would cost us to repair or replace your home.

If your repair or replacement costs are higher than expected, feel confident knowing you’re likely covered with safety net home protection.

Get a GIO Home & Contents Insurance Quote

Value your contents correctly

It’s important to accurately evaluate the replacement value of your possessions. Things like jewellery, appliances, furniture and artwork can quickly add up to thousands of dollars in value.

It's also equally important to consider the value of everyday items such as crockery, cutlery, clothing and bed linen. These seemingly small items can add up if they need to be replaced all at once due to damage.

To effectively assess the value of your contents, here are a few simple tips to follow:

  • Go room by room and list everything that’s in it (remembering to include any carpets and window coverings).
  • Regularly update your list.
  • Take photos of your valuable items.
  • Keep receipts where needed.

We also created a Contents Insurance Calculator to help estimate the value of your belongings. Remember, the more thorough your contents record keeping is, the more accurate your sum insured will be and the easier it'll be to provide a list of items at claim time.

Use Contents Calculator

Regularly review and update your policy

If you make any changes to your home that could affect your sum insured, let your insurer know. Some renovations may increase your home's value and rebuild costs — so if you don't adjust your sum insured accordingly, you risk being underinsured, especially if it's been a while since you took out your insurance policy. If you are getting work done, remember that GIO doesn’t cover loss or damage caused by building alterations or renovations. Ensure that your builder has an appropriate insurance cover before the work begins.

On the flip side, if you sell valuable items, reducing your contents sum insured could save you money on your premium.

Choosing the right level of cover for you

Your home is likely the most valuable asset you'll ever own, so it's worth taking the time to accurately assess and insure it. It's also important to read the fine print of your insurance policy, as different policies cover different things.

With GIO, we offer three different levels of home insurance coverage and a wide range of optional covers, including GIO Home Assist, Specified and Unspecified Portables Valuables, accidental damage at home cover and more.

Compare Home Insurance covers

Read more:

1 Insurance Council of Australia

Insurance issued by AAI Limited ABN 48 005 297 807 trading as GIO. Read the Product Disclosure Statement before buying this insurance. Go to for a copy. Target Market Determination is also available.

The information is intended to be of general nature only. Subject to any rights you may have under any law, we do not accept any legal responsibility for any loss or damage, including loss of business or profits or any other indirect loss, incurred as a result of reliance upon the information. Please make your own enquiries.