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  • Writer's pictureAmanda Bird

Why You Need to Invest in Home and Contents Insurance

Whether you rent or own your home, the amount of stuff you have can quickly add up over time. What if you suffer damage to your personal belongings, such as chairs, clothing, and electronics? What if the furnace goes out in your home or your clothes are ruined in a storm? This is where contents insurance comes into play. You can file an insurance claim to help replace your items if they've been stolen or damaged by a covered peril, such as a fire. An insurance policy helps cover the cost of replacing these damaged items; however, there are limits on the amount of coverage your insurance policy may offer.

It's essential to understand what type of coverage you have and how much it may pay for a covered claim. Read on to learn about how contents insurance works, coverage limits and some things to consider.

What Is a Content Insurance Policy?

A contents insurance policy is a contract between you and a licensed insurance company. It allows you to receive compensation for your personal property if it is destroyed or damaged by a covered peril.

Personal property is anything in your home that can be moved or carried, including furniture, clothing, appliances, televisions, computers, sporting goods, jewellery and so on.

The personal property you have insured is called "contents."

What Are Contents Insurance Limits?

The contents limit applies to the property value the insurance company pays for a covered claim, not the total value of your possessions. For example, if your property is worth $30,000, but your policy only has a coverage limit of $25,000, the most the insurance company will pay for a covered claim is $25,000.

Often, a policy will have separate limits for different categories of property, such as a limit for jewellery, a limit for your personal possessions, a limit for your clothing and a limit for all remaining property.

The maximum amount of money the insurance company will pay you for the contents in your home if they are damaged or destroyed by a covered peril after a loss occurs is called the "contents insurance limits."

Typically the amount of contents insurance limits is matched to the contents coverage limit of your home's physical damage insurance policy (often called the "structural policy").

What Is Optional Coverage?

Optional coverage is a separate limit of insurance you can add to your policy to increase the amount of money the insurance company will pay to replace your destroyed or damaged personal property. You must decide how much optional coverage to add to your policy when you purchase a policy, and it cannot be changed once you purchase your policy.

Why Is Home and Contents Insurance Important?

There are several reasons why you should consider purchasing a home and contents insurance policy:

  • Theft and vandalism: If someone breaks into your home and steals your property, your contents insurance could protect you from financial disaster.

  • Natural disasters: Your contents insurance could pay for the cost of replacing your damaged property if a flood, fire, earthquake or other weather-related disaster occurs. In some cases, the insurance company will only pay you for the cost of what the property was worth immediately before the disaster.

  • Cost for Repairs: If a covered peril causes damage to your home, your policy could pay for some or all of the cost of repairs.

  • Accidental Damage: Accidental damage such as breakage or damage to your home can be repaired. Your policy could pay for these repairs.


Getting your house and all your belongings insured is crucial if you want to live comfortably. Having the peace of mind that you won’t be facing financial disaster in case something terrible happens to your home is something you should strive for. This guide shows you just how vital contents insurance is and why you should invest in it as well.

New Wave Insurance works with several insurance providers to bring you the best possible solutions. We are one of Gold Coast’s premier insurance brokers helping businesses find the right insurance vehicle for them. With our three-step action plan, we’ll give you all the possible options suitable for you, and we just let you decide based on our recommendations. Contact us today to book a free 15-minute consultation with our insurance specialist!

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