What does home and contents insurance cover?

Understanding what can you claim on your home and contents insurance

We don't like to imagine storms, fires, or theft happening but, sadly, they do. Home and contents insurance can help keep you safeguarded financially if your belongings are ever damaged, stolen, or lost in these unexpected events. However, not all policies are the same. It's important to understand what’s included (and what’s not) so that you're able to choose the right cover for your needs. 

In this guide, we’ll walk you through the essentials of home and contents insurance, including what’s typically covered, common exclusions, and tips to help you make informed decisions. 

In this article you will learn: 

1. Key takeaways
2. What is home and contents insurance?
3. What is covered and examples of what you can claim
4. Some examples that are not covered by home and/or contents insurance
5. Understanding excess and why it matters when making a claim
6. Optional benefits to add and what do they cover
7. Who needs home and contents insurance?
8. The benefits of having home and contents insurance
9. RACQ's tips for buying home insurance

Key takeaways

• When taking out home insurance, make sure your level of cover is based on the rebuild and replacement cost. Calculating the replacement or rebuild cost can help you estimate how much you need to insure your home and contents for.  
• When estimating the replacement or rebuild cost of your home, be sure to exclude the value of the land. Your insurance should be based solely on the cost to rebuild the home building itself. 
• Understanding exclusions in your policy is crucial to avoid surprises when making a claim. Policies generally exclude damage from actions of the sea (like erosion), illegal activities, and wear and tear.  
• You'll want to check if your home insurance will financially protect you from weather events. For example, RACQ's home insurance includes automatic cover for storms and floods. 
• Reviewing your policy every year can help you avoid being caught out underinsured.  
• Optional extras often can only be added when you first take out the policy or at renewal—they can’t be added mid-term. 
• Home insurance typically covers loss or damage caused by water leaks. RACQ's home insurance offering covers water damage from appliances like washing machines and refrigerators as well as plumbing systems (provided they have been maintained and repaired as required). For example, damage caused by leaks originating from a shower recess would not be covered.   

What is home and contents insurance? 

Home and contents insurance combines building insurance for your home’s structure and contents insurance for your belongings. Bundling both can simplify your coverage and may even save you money. 

No matter what type of policy you choose, it is important that you insure your home and/or belongings for the amount that it would cost to rebuild or replace them. You can get an idea of how you much you need to insure for by using RACQ’s online calculator. With the right cover for the right amount, you’ll be able to more adequately protect yourself financially when the unexpected happens. 

What does home and contents insurance cover? Examples you can claim 

Home building insurance generally covers your home's structure, including fixtures like your roof, walls, and fences. It can protect against events like storms, fires, and vandalism. Contents insurance, on the other hand, covers your belongings (from furniture to electronics) against loss or damage caused by events like theft or water damage.  

RACQ covers 14 insured events. These include animal damage, earthquake, explosion, fire, flood, impact, leaks, lightning, riots, storm, storm surge, theft, tsunami and vandalism. You can make a claim for any of these events if you have RACQ home and/or contents insurance. Refer to your Household Product Disclosure Statement (PDS), any applicable Supplementary PDS, Key Facts Sheet and Target Market Determinations for a clear list of inclusions and insured events and ensure your coverage matches your needs.  

1. Examples of what may be claimed under home building insurance if damaged during an insured event:

2. Examples of what may be claimed under contents insurance if damaged during an insured event:

Some examples that are not covered by home and contents insurances 

While home and contents insurance provide valuable protection, certain situations are usually excluded. These are known as general exclusions and may apply across all parts of your policy. These include but aren’t limited to: 

1. Certain actions by the sea

For example, damage caused by actions of the sea (like erosion or king tides) may not be covered. However, events like floods, tsunamis, or storm surges may be included.  

2. Illegal activities 

Additionally, you won’t generally be covered for loss or damage related to breaking the law, such as failing to comply with firearms regulations or engaging in illegal activities.  

3. Normal wear and tear or deliberate damage 

Other exclusions include wear and tear or deliberate damage. Be sure to review the PDS carefully for a full understanding of what’s not included. 

More items that are not covered under RACQ's home and/or contents insurance:

The tables provided are a general guide. Insurers vary in their home and contents insurance policies, including inclusions, exclusions, limits, and definitions. For full details of what’s covered under RACQ Home and Contents Insurance, refer to our Product Disclosure Statement (PDS), any applicable Supplementary PDS, Key Facts Sheet and Target Market Determinations 

Understanding excess and why it matters when making a claim

When you make a home and/or contents insurance claim, you'll usually need to pay an amount called an excess. The excess amount is your contribution towards the cost of each claim you make. 

You can choose your excess amount when you take out or renew your policy.  Choosing a higher excess generally results in a lower premium, while a lower excess leads to a higher premium.  

Keep in mind that if something goes wrong and you need to claim, you’ll have to cover the excess amount first, before your insurer can cover the rest. 

For example, if you need to lodge a claim for a TV that was damaged by an insured event and your contents insurance claim is approved for $2,800, providing that your excess is $800, the total claim settlement would be $2,000. 

Always check your Certificate of Insurance for details on the excess amounts that apply to your policy. 

Optional extras to add to your home insurance policy for further protection 

For added protection to your home, you can enhance your coverage with optional extras. These additional benefits, available for an extra premium, allow you to tailor your policy to your unique needs. When selected, they will appear on your Certificate of Insurance (COI).  

Note that optional extras can only be added when you first take out the policy or at renewal—they usually can’t be added mid-term. Also, these benefits apply to loss or damage occurring during your policy’s active period. 

1. Advanced Cover for accidental damage 

With Advanced Cover, you’re safeguarded against accidental damage and motor burnout affecting your home or contents. When you’ve got Advanced Cover for home insurance, we cover accidental damage to fully enclosed and lockable areas, such as inside your home or garage. For Advanced Cover with contents insurance, protection extends to items like furniture, wall hangings, glass ornaments, electronics, and even outdoor furniture.  

2. Motor burnout  

Motor Burnout covers damage to domestic electric motors when their wiring burns out. It applies to items like ovens, fridges, air conditioners, and dishwashers under your building or contents policy. This benefit includes motors up to 10 years old, as well as labour, installation, and call-out fees. If you have Contents Insurance, it also covers limited food spoilage from motor burnout in a fridge or freezer. 

3. Mobile phone cover  

With this optional benefit, your mobile phone is protected against accidental loss or damage anywhere in Australia or New Zealand, up to the sum insured listed on your Certificate of Insurance (minus any excess). However, it doesn’t cover wear and tear, warranty issues, or costs for lost data or restoring files. 

4. Increased landlord fixtures and fittings  

With RACQ, if your home is listed as ‘Tenanted’ on your Certificate of Insurance, you have the option to increase your coverage for landlord fixtures and fittings.  These include cover for accidental or malicious damage by tenants, theft, and lost rent while repairs are made after an insured event. If you need to increase your cover, there may be optional benefits available from your insurer.   

5. Pet cover  

Optional pet cover helps with vet bills for injuries, illnesses, or ongoing conditions for your dog or cat. To qualify, your pet must live at your home, be listed on your Certificate of Insurance, and receive vet care. Cover is available up to $750 for each separate injury, illness or disease (less any excess that applies). Routine care, pre-existing conditions, and issues related to business or sporting activities aren’t covered. 

6. Items away from home  

The optional 'Items away from home' benefit protects your belongings from loss or accidental damage anywhere in Australia, New Zealand, or while traveling between them. For this type of policy addition you can cover individual items, like jewellery or electronics. Alternatively, you may choose to group coverage of your belongings. You can nominate a specific insured amount without listing each item. Covered items can range from household items like coats and bags to equipment and sporting gear.

Exclusions do apply for this type of cover. Refer to the coverage limits and exclusions in the Product Disclosure Statement (PDS).

7. Small business contents

Your standard contents policy doesn’t cover stock, equipment, or materials used for business purposes. 

However, you can choose to add the ‘small business contents’ optional benefit. This optional cover allows you to claim if your office equipment and stock that are a part of your small business are lost or damaged due to an insured event. Claim limits apply, please refer to the Product Disclosure Statement (PDS).

Please note that the small business optional benefit doesn’t include liability cover for business activities.   

With a range of optional benefits to choose from, RACQ home insurance provides flexible solutions to fit your needs, to help you deal with any unforeseen challenges come your way. 

Who needs home and contents insurance?

1. Homeowners  

Your home is likely one of your biggest investments and a symbol of years of hard work and saving. Protecting it with comprehensive home and contents insurance provides you with financial safeguards against unexpected events. This type of cover protects both the structure of your home and the belongings that make it uniquely yours. Every home is different, so it’s important to choose a policy that fits your needs.  

If you live in a strata property with a Body Corporate, there may already be strata insurance. Be sure to check what is covered and not covered. This will help you decide what extra coverage you need to take out in your own home insurance policy. It’s worth noting that if you live in a strata property, while you may already be contributing to strata insurance for your building, owners are still encouraged to take out a contents insurance policy.   

Get a home insurance quote with RACQ and see what coverage options may be available to you as a homeowner. 

2. Renters  

As a renter, your belongings are what make your space feel like home. While your landlord is responsible for insuring the building itself, protecting your own possessions with contents insurance can provide you with financial security against unexpected events like theft, fire, or damage.  

Surprisingly, an RACQ study* found that 78% of Queensland renters have not insured their contents, and 21% of uninsured people have never even heard of contents insurance. This means that a significant portion of renters are overlooking a potentially important financial protection available to them. 

From electronics to furniture and personal valuables, safeguarding the value of your items is one way of protecting yourself from financial loss. Every renter’s needs are different, so it’s important to find a policy that works for you. Start by exploring RACQ’s contents insurance options to see how you can protect what’s yours. Learn more about contents insurance for renters. 

3. Landlords and investors  

Your investment property is a valuable asset and the result of strategic planning and financial effort. Protecting it with building insurance provides essential safeguards against unexpected events like storms, floods, or structural damage. This type of cover focuses on preserving the physical integrity of your property, ensuring it remains a secure and profitable investment. 

With RACQ, if you're a landlord and your property is 'tenanted' (as shown on your certificate of insurance) your home policy includes limited cover for additional fixtures and fittings. For added protection, you can choose a higher level of cover for these items by paying an additional premium. This includes floor coverings, carpets, light fittings, blinds and curtains. 

This is why it’s important to understand what may or may not be covered under different policies. Explore RACQ’s home building insurance options to see how you can protect your investment.   

The benefits of having home and contents insurance 

Here are five reasons why this type of cover is a smart investment for homeowners, renters, and landlords alike.

1. Get tailored financial protection against the unexpected
   Whether it’s a storm, fire, theft, or accidental damage, home and contents insurance provides a safety net. It can save you from potentially devastating out-of-pocket expenses. However, insurance isn’t one-size-fits-all. You can tailor your policy to match the level of coverage you need, whether it’s building, contents, or a combination of both.
2. Experience a sense of financial security
   Knowing that your home and belongings are protected allows you to enjoy your space without constantly worrying about what could go wrong.
3. Get legal liability coverage
   Many home insurance policies include liability protection, covering you if someone is injured on your property or if your actions inadvertently damage someone else’s property.
4. Take advantage of potential discounts
   Bundling home and contents insurance may save you money while simplifying the management of your policies. Being an RACQ member allows for additional discounts.
5. Feel supported in crisis situations
   If your home becomes unfit to live in due to an insured event, you may be entitled to additional support, like temporary accommodation, meaning you have a place to stay while your home is being repaired. 

RACQ's Tips for Buying Home Insurance 

We’ve asked the RACQ team for their thoughts on what to look out for when buying a home insurance policy so that you can start your search from an informed position. Here are the top tips for Queenslanders on how to protect their home and property.

1. Calculate rebuild costs accurately to avoid underinsurance 

Ensure your sum insured reflects the true cost of rebuilding your home, including materials, labour, and any additional features. RACQ Home Insurance Calculators are a valuable tool to help you accurately assess your coverage needs. Getting an accurate figure for this can help you avoid being underinsured in the event of significant damage. 

2. Don’t forget the value of your contents   

Regularly take stock of your belongings and update your contents insurance to reflect their current value. This will help you stay adequately covered if you need to replace items due to loss or damage

3. Understand your policy’s exclusions 

Carefully read through the exclusions in your policy to know exactly what is and isn’t covered. This helps you avoid surprises when making a claim. 

4. Review your natural disaster coverage 

Depending on where you live, ensure your policy covers common risks like storms, floods, or bushfires. Tailoring your policy to your location is key to comprehensive protection. 

5. Bundle your policies for potential savings 

Combining home and contents insurance under one provider may lead to discounts and make it easier to manage your policies. 

6. Review and adjust annually 

Property values and replacement costs can change over time. Make it a habit to review your coverage each year and adjust your insured amount to match current needs. 

7. Don't be afraid to ask questions 

If you’re unsure about coverage or specific needs, don’t hesitate to contact RACQ to get clarity about the different policies on offer. That way, you’ll have more confidence that you’ve found a policy that fits your home and lifestyle perfectly. 

Additional questions you may have 

1. How much is home and contents insurance? 

The cost of your home and contents insurance will vary depending on several factors. These may include the value of your home, belongings, your location, and the level of coverage you choose. Getting a personalised quote can help you find the right coverage at a price that works for you. 

2. Does home insurance cover water leaks?   

Yes, RACQ home insurance typically covers loss or damage caused by water leaks. This may include water damage from washing machines, refrigerators, water tanks, and fixed plumbing systems. When applicable, the cost of investigating the source of a leak is also covered.  However, exclusions apply, such as damage from leaks you knew about but didn’t repair, gradual leaks, or leaks from shower recesses or fish tanks. Always check your Certificate of Insurance (COI) and the general limits outlined in the Product Disclosure Statement (PDS) to understand your coverage. 

3. Does home insurance cover tree removal?  

Home insurance may cover tree removal (excluding the stump) if the tree falls on your home, garage, or other insured structures due to a covered event like strong winds or lightning. This includes the cost to remove the tree and repair the resulting damage. However, tree removal isn’t typically covered if the tree falls without causing damage, or if it falls due to negligence. It’s essential to review your policy details or consult with RACQ for confirmation about specific scenarios.

Protect what matters most with the right home and contents insurance. Explore RACQ’s home insurance options today and take the first step toward financially safeguarding your property and belongings. Get started today.