Before becoming a homeowner, you need to ensure your property is protected with the right insurance. This means the very first thing you should do after entering into a purchase contract is to contact an insurance company and insure your property.
You read that correctly! Just the fact that you entered a contract which may crash on finance, requires you to have insurance on the property, as you are liable in the advent that the property is damaged, floods or burns down whilst under contract.
Keep in mind that insurance companies will provide temporary covers which can be cancelled with all funds returned in the advent that the contract does not proceed.
TYPES OF INSURANCE
Also known as building or house insurance. Covers the building, domestic fixtures and permanent structural improvements.
For home insurance, don’t include the cost of your land – only your building’s replacement value. Consider the internal fixtures and fittings, and any structural improvements like in-ground swimming pool, awnings, fencing etc.
Contents insurance provides protection against theft, damage or loss of personal possession. Contents insurance is generally associated with the estimated value of your contents and will cover furniture, electronics etc.
TIP When taking out Contents Insurance, consult your insurance specialist, to ensure that any specific valuable possessions are covered. Often, items of fine jewelry, artwork and antique furniture are not automatically covered, needing you to nominate the item and specify the amount you would like the item insured for.
It is possible to combine your contents and home insurance into a single policy. Contents insurance is also an option and frankly recommended not only for your own home, but also if you are renting as your contents are not covered by the Landlord’s insurance.