How much should you insure your house for?

Houses come in all shapes and sizes, as do the insurance options for covering them. The way we live and work in them 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 how much you want to insure your house for.

Understanding your sum insured

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

Remember, your home’s sum insured amount is not the price you paid for the property, or what its market value is. It’s your estimate of how much it would 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 accurate and to avoid underinsurance, regularly review and update the sum insured on your Home and Contents Insurance.

Calculating home building costs

Two common ways of working out how much it would cost to rebuild your home are:

  • calculating a cost-per-square-metre, 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, it can be inaccurate in terms of actual replacement costs.

The elemental estimating method provides a much more detailed assessment of your home and belongings, as it considers things like:

  • period of construction (e.g. Victorian, Federation or contemporary)
  • size (including total area and floors)
  • construction quality (e.g. 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 material 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.

Calculate The Replacement Value Of Your Home

Safety net home protection

Even if your home sum insured is accurate, costs can unexpectedly spike if there is a shortage of materials, or a rush on building services following a natural disaster. Some premium Home and Contents Insurance policies — including GIO’s — will offer you a safety net above 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.

Calculating contents costs

It’s important to accurately assess what you own and determine how much it would take to replace it. Things like jewellery, appliances, furniture and artworks can quickly add up to thousands of dollars in value.

While big ticket items, 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.There are a few simple tricks to help you assess the value of your contents:

  • 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.

Choosing the right level of cover for you

GIO offers three levels of Home and Contents Insurance cover to match your budget: Classic, Classic Extras and Platinum.

Classic is our standard level of cover. It provides coverage for insured events and provides you with the flexibility to choose any relevant optional covers. Classic Extras includes the same cover as Classic, but with the added benefit of additional covers such as accidental loss or damage at home and portable valuables. Our highest level of cover, Platinum, provides coverage for all this and more!

More about Home And Contents Insurance

Consider additional features and optional covers

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

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Insurance issued by AAI Limited ABN 48 005 297 807 trading as GIO. Consider the Product Disclosure Statement before buying this insurance..

This advice has been prepared without taking into account your particular objectives, financial situation or needs, so you should consider whether it is appropriate for you before acting on it.