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  • Writer's pictureReuben Bergola

Home & Contents Premium: What Kind of Factors Can Affect It?

Upon purchase of a home and contents insurance policy, there will be a number of factors that an insurer will take into consideration. This is in order for the monthly premium to be calculated properly. Aside from the house value, other circumstances will come into play as well.

Read on to learn more about what kind of factors can affect home & contents premium:

Sum Insured

When you purchase your home and contents insurance, your insurer will make sure you have enough insurance to rebuild or repair your home in the event of a catastrophe. The amount you receive is called your 'sum insured, and you need to make sure it is sufficient enough to cover rebuilding or repairing costs. Otherwise, you could find that your insurer does not pay you all the money you need to repair or replace your damaged items.

This is called underinsurance, and it means that you have too little insurance.

Does the estimated value of a home basically equate to sum insured?

It should be, but there are some considerations that need to be looked into. You don't need to include the value of your land in the sum insured amount. That's because you're assumed to be insuring only the building and not the lot it's built on.

Some land properties might be worth a few million dollars. The home proper might only be worth a few hundred thousand, however. So the insurance will only have to be for a couple hundred thousand, not in the millions range (not even a single million).

That said, you should insure your home for a sum insured amount that's beyond the present cost of replacement or rebuilding it. A home and land could be worth $250,000 in a remote town but cost $450,000 to replace. It's important to take rebuilding costs into account that would have been paid out of pocket otherwise. Building materials can also end up more expensive over time.

Replacement value should include associated outbuildings on top of the whole structure. The same logic should apply to belongings within the home and even the immediate surroundings. Especially important and valuable items will benefit from an additional valuables cover.


Reaching your insurance policy's excess amount triggers payment of the cost of an insurance claim.

Most insurance policies have a basic or standard excess amount, which is applied to every claim. You may also be able to choose a higher excess amount that reduces your premium. However, you may then be responsible for reaching a higher excess amount for every claim.

Home and contents insurance policies could possibly have separate excesses for content claims and home claims. That means either excess amount can be raised or lowered according to preferences.


When a home and contents insurance policy is purchased, the insurer takes quite a number of things into consideration. This is how they calculate the monthly premium for the policy. Aside from the overall value of the house, sum insured and excess are taken into consideration.

Seeking home & contents insurance in the Gold Coast? Reach out to New Wave Insurance today! We can’t wait to help you find the right insurance for your business, assets and/or vehicles.

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