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What is home insurance? What does it cover?

23 Dec2020

For most of us, our home is the most valuable purchase we ever make. But a home is more than just a thing we buy, or some building with our things stuffed inside it. Our homes are where we see our loved ones, where we raise our families, where we host our friends, the place we miss when we’re away, and a safe space where we can be most ourselves. Darryl Kerrigan knew what he was talking about when he said, “It’s not a house, it’s a home.”

Whatever your home looks like — a house, a terrace, an apartment, or a studio — you’ll want to keep it safe. This means more than locking doors at night, or keeping your gutters clear of dead leaves in summer – it can also mean getting home insurance as financial protection if something unfortunate happens.

What is home insurance?

Home insurance is a financial safety net to help protect the place you own and live in — your home. It’s designed to provide you with some peace of mind that if the unexpected happens to your home and/or your possessions inside it, you’ll be protected from major financial turmoil. If something does happen and it’s covered under your policy, home insurance can help you recover some or all of your costs, make repairs, or replace lost items.

What does home insurance cover?

There are three main types of home insurance: (1) building insurance; (2) contents insurance; and (3) combined home and contents insurance. These are differentiated by what part of your home they cover — so if you’re after an insurance policy, you’ll need to understand what items are counted as part of the ‘building’ and which count as ‘contents’ of your home.

The range of inclusions in each category will depend on your insurer and policy, but this should give you an idea of what often counts in each:

  • Building — this is the actual structure (i.e. the roof, walls, floors, etc.) plus permanent fixtures, often including: sheds, carports, fences, decks, solar systems, and pools.
  • Contents — these are the things inside your home, like: furniture, appliances, TVs, books, computers, artwork, and clothing.

Depending on your insurer, you can get an insurance policy to cover your building and contents separately, or you can get a policy which covers both. It’s important to pay attention to the fine print when comparing home insurance quotes.

Does People’s Choice offer home insurance?

Yes! At People’s Choice, we’ve teamed up with CGU to provide our members with two options for home and contents insurance: Accidental Damage, and Listed Events. With these policies, you’ll get cover to protect what matters most; plus, you can choose to add on (or leave out) optional valuables cover.

Insurance can be complex and there’s a lot to say about every policy. You can find the product disclosure statements and full details of our policies at the links below.

These insurance policies are written in plain English and are designed to give you all the information you need. However, if you have questions or need a hand with getting through them (we know there’s a lot in there!), please get in touch with us or visit us at a branch to have a chat about the full details.

What events are covered by home and contents insurance?

There are strict conditions on what types of events are covered by home insurance. Every insurer and policy has its own limits and restrictions, so you’ll want to pay attention to the fine print. Home and contents insurance through People’s Choice covers:

  • Fire and explosion,
  • Flood,
  • Storm,
  • Accidental breakage,
  • Earthquake,
  • Lightning,
  • Theft and burglary,
  • Tsunami,
  • Malicious damage,
  • Impacts,
  • Escape of liquid,
  • Removal of debris, and
  • Alternative accommodation.

Each of these have their own limitations depending on your policy level, with different conditions for your building and contents. You can find simple explanations of what each means at the links below:

Does home insurance cover flood damage?

For insurance obtained through People’s Choice, the answer is ‘yes’ — but there are some exceptions. For instance, with CGU’s policies you won’t be covered for flood damage if the building was already structurally defective due to shoddy construction, or if the water entered the building through an opening made for renovation.

It’s important to check the details in the policy’s product disclosure statement to make sure you get the cover that suits your needs best. If you’ve got any questions about cover limits, reach out to us and we’ll give you a hand.

How do I calculate how much home insurance I need?

Part of working out your home insurance policy needs is making an reasonable estimate of how much your home is worth. This isn’t the same as how much you would sell the property for — it has to do with the cost to replace everything if you lost the building and/or contents inside.

To make things easier for you, we’ve created two calculators to help you estimate how much insurance you might need. These are no substitute for a professional appraisal, but they can give you a good idea of the approximate cost to rebuild or repurchase everything. If you’re just getting started with comparing home insurance policies, we encourage you to give them a go:

Do I need home insurance?

If you aren’t a homeowner you won’t need building insurance, but you may want contents insurance. If you are a homeowner, you may want both.

Either way, you should assess your personal circumstances before you decide. You can reach out to us on 13 11 82 or visit us in one of our branches to chat about your needs.


Subject to the product issuer’s underwriting rules and acceptance guidelines. Policy conditions, limitations and exclusions apply. Please read the Product Disclosure Statement (PDS) for full details. Terms, conditions and exclusions apply and are available upon application.

The information above is general advice only and does not take into consideration your personal objectives, financial situation or needs (“your personal circumstances”). Please consider the relevant Product Disclosure Statement (PDS), other Disclosure Documents and your personal circumstances before making any decision to purchase the products. Contact us on 13 11 82 with any questions, or visit your nearest branch to talk to a consultant.

Home insurance is issued by Insurance Australia Limited ABN 11 000 016 722 AFSL 227681 trading as CGU Insurance.

People’s Choice Credit Union, a trading name of Australian Central Credit Union Ltd. ABN 11 087 651 125 Australian Financial Services Licence 244310, acts under its own Australian Financial Service Licence and under an agreement with the insurer Insurance Australia Limited ABN 11 000 016 722 AFSL 227681 trading as CGU Insurance.

If home insurance sounds like something you need, you can get a quote on home insurance to see how much it might cost to get cover.

We’re happy to provide everyone with a quote, but to take the quote to policy, you must be a member of People’s Choice. You can click here to get more information on membership or easily apply to become a member.

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