What Building Insurance Covers on Its Own
Building insurance protects the physical structure of your home — walls, roof, floors, ceilings, permanent fixtures like built-in kitchens and bathrooms, and attached structures such as garages, carports, decks, fences and retaining walls. It's the policy your mortgage lender requires as a condition of the loan, since the building is effectively their security for the debt.
What It Doesn't Cover
Building insurance stops at anything that isn't fixed to the property. Furniture, electronics, clothing and appliances all fall under contents insurance instead — a distinction that matters most for owner-occupiers deciding whether to buy building-only or combined cover.
Standalone Building vs. Combined
Most owner-occupiers buy combined home and contents cover because bundling is usually cheaper than two separate policies and simplifies a claim when one event damages both the structure and belongings. Building-only makes sense mainly for landlords (who insure the structure but may not own the contents) or owners who are confident their contents value is low enough not to need separate cover.
Getting the Sum Insured Right
The building sum insured should reflect the actual cost to rebuild — not your home's market value, which includes land value and location premium that have nothing to do with construction cost. Use your insurer's rebuild calculator or a professional valuation, and revisit it after any renovation.
This page is for educational purposes and isn't personalised financial advice. Premiums, terms and eligibility vary by insurer, state and individual circumstances — always check the Product Disclosure Statement (PDS) before buying.