Compare building insurance

What is building insurance?

Building insurance is a type of home insurance that covers the physical structure of your home, along with other buildings on your property. It can protect residential homes including free-standing homes, townhouses and terrace houses. 

If you are looking to insure your property – whether living in it yourself or renting it out as an investment – you’ll want to consider building insurance. It differs from contents insurance, which protects the belongings within your home against financial loss.

What does building insurance cover?

Building insurance can pay to replace or repair your home’s structure if something goes wrong. It covers loss and damages from events like fire, flood, storm, lightning, explosion, theft and vandalism.

In addition to your house, building insurance can protect a number of other fixed structures. These are wide-ranging and may include garages, sheds, granny flats, in-ground pools, solar panels and fences.

Here are some examples of what may be included under building insurance:

• Legal liability. This can cover the legal costs if someone is injured or killed on your property after an accident. An example of liability could be if a dog bites a guest at your home. Your insurance might cover the person’s medical bills. 
• Temporary accommodation. A number of providers will pay costs so you can be housed if your home becomes unlivable following an insured event. It’s usually time restricted, such as up to one year. The accommodation can extend to family pets.
• Removal of debris. If your home is destroyed, the cost to demolish and remove the remains can be very expensive. Certain policies will add as much as 20% in extra cover for these costs. That’s on top of your sum insured.
• Replacement of locks and keys. To keep your home secure, a provider may pay for costs incurred in replacing stolen keys, locks and key codes. 
• Environmentally-friendly rebuilds. Some insurers may pay an extra benefit for costs toward the installation of environmental systems, such as a rainwater tank, during a rebuild.

Additionally, you can pay to add optional covers to your building insurance. Examples include accidental damage cover (for damages caused by a power surge, for instance) and flood insurance. You could even be covered for rent defaults, if you hold a landlord insurance policy.

Remember, what’s covered by building insurance depends on the type of building insurance you have and the specified inclusions of your policy.

What’s the difference between building insurance contents insurance?

Building insurance is often referred to as ‘home insurance’, which is one half of a home and contents insurance policy. Contents insurance is the other half, which covers the belongings within your home against theft and damage. 

If you’re living in the property (as opposed to renting it out) and want this kind of coverage as well, it’s common to take out combined home and contents insurance.

If you have an investment property, you may opt for landlord insurance. This provides similar coverage to building insurance, but can cover events such as lost income if a tenant defaults on their rent. It can also cover legal liability if anyone is injured or dies on the property.

If you're after a combined home and contents policy, start researching with these options from the Mozo Experts Choice Home Insurance Awards.

How much building insurance do I need?

Having adequate protection in place could save you many thousands of dollars in out-of-pocket expenses after loss or damages. It’s really important not to cut corners and simply opt for the cheapest cover – particularly if doing so leads to you being underinsured. 

Essentially, underinsurance is when your home costs more to repair or rebuild than the “sum insured” you’ve agreed with your insurer. It can create an expensive problem for you at claim time. For this reason, your building insurance policy ought to cover the total replacement cost of your property. Your total cost should include your home’s main structure and all outbuildings, such as garages and sheds.

To help with an accurate estimate of your total replacement cost, speak with an architect or builder who you trust. There are a number of online calculators that can help you work out your figure. 

Some insurance providers offer underinsurance protection as an optional extra. This can add a layer of peace of mind in case your valuation is too low.

Once you’ve worked out your total replacement cost, re-visit this at least once a year. Doing so makes it less likely you’ll fall behind rises in the cost of living including building costs.

How do I choose a building insurance policy?

As always, best practice in choosing any financial product is to assess your needs, compare options and find an offer that aligns with both. 

For choosing building insurance, you should have the home valued to ensure you’re covered at the right level. Consider any extra events or elements of your property you might want covered. This could be additional flood cover, or more coverage for your new garden and landscaping.

Then, you should review Mozo’s comparison table above and find a policy which includes the cover that’s matched to your needs.

How can I reduce the cost of my building insurance?

There are several ways to get cheaper building insurance, without needing to reduce the level of cover you get. Some of these cost-saving moves you can make include:

Compare and haggle. Always shop around at your policy renewal time to compare offers. Building insurance providers are just like other businesses and have discounts or incentives that can save you money. Even if you're happy with your current insurance company, it's a good idea to know what the competition is offering and see if you can score a better deal by switching.

Add security features to your property. The more secure your property, the better position you’ll be in to get a lower premium. Add locks on doors and windows, and consider installing security features such as alarms, sensors or cameras.

Make sure you are getting any relevant discounts. There are a heap of discounts which could be applied to your policy to reduce your premium if you’re eligible for them.

This includes: 

• No claims discounts: If you haven’t made a claim in a set period of time, you can start to build up a no claims bonus or discount on your premium. If you’re looking to switch insurers, many providers will honour the discount provided by your current provider.
• Bundled products: You can often secure a discount if you hold more than one insurance with the same provider. For example, you might consider getting your car insurance moved across at the same time to access a policy discount.
• Pay annually. If you can afford the upfront cost, you could save by paying your yearly premium in one go, rather than monthly. 
• Online application discounts: Some providers offering building insurance will apply a discount on your first year’s premium if you buy the policy online. 
• Loyalty discounts: If you stay with a building insurance provider for a certain number of years, a loyalty discount may kick in. Ask your insurer if they can offer you any savings.

How do I find the best building insurance?

If you’re on the lookout to find Australia’s best building insurance, a great place to begin is by checking out the winners in the Mozo Experts Choice Awards in the Exceptional Value and Exceptional Quality categories. Our experts analysed the pricing and product data and determined these as the insurance policies bringing to the table the best price, range and features in the market.

No two customers have the same needs when it comes to building insurance; it’s important to bear this in mind when comparing policies.