Our Home Insurance Guide To: Financial Freedom

Buying a home is a huge financial commitment. And although we don't like to think about it, there are plenty of things that can go wrong, such as fire, theft, natural disasters... all of which could leave you financially strapped or even bankrupt. So don't take the risk, make sure you're covered with our guide to financial freedom and home insurance.

The power of nature

The horrifying images of bushfire or flood devastation remind us all too regularly that Australians are prone to sudden, unexpected and potentially devastating natural disasters. Even if you don't live near a national park or river, your home could be badly damaged by wind, stormwater or hail. Or even disasters of the man-made variety, like a faulty electric heater.

Don't risk your memories

Burglaries and theft are the most common reported crimes in Australia. In just a few minutes you could lose your laptop (and all your digital photos), your home theatre system, or granny's heirloom jewelry. Some things are easier to replace than others, but as long as you have contents insurance you won't be out of pocket if you have to go shopping.

Sudden impact, long-term financial damage

Fire + no home insurance = a mortgage on something that no longer exists. That simple calculation could mean long-term financial hardship for you and your family. In addition to that mortgage, you'll be up for all the re-building costs, rent on somewhere to live nearby while you build, and the cost of replacing all your furniture and possessions. If you can't finance that, you could be forced to sell your home for land value only.

Check you're fully covered

You'd be surprised how much it can cost to re-build your home, and how long it takes - especially if you're part of a major local disaster. So over-estimate if you're not sure, and remember to include costs like debris removal, landscaping, architect fees and perhaps that granite kitchen benchtop you've always wanted. With your contents insurance, check you have new-for-old replacement. And make sure you also have legal liability coverage, so you don't run the risk of being sued by an angry neighbour if an accident is technically your fault!

Save money on your premiums

Getting the best home insurance coverage doesn't have to cost the earth. You should be able to make monthly payments, rather than a big annual lump sum, without being stung by any finance charges. You can also choose to increase your excess to reduce your premium. And if you combine your home and contents insurance with one insurer you should also qualify for a handy discount. The important thing is to shop around and compare quotes online, so you know exactly what you're getting if something does happen to go horribly wrong.