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How much should you insure your house for?


If the worst happened, would you have enough home insurance cover to start from scratch? If you don’t, you’re not alone. Many Aussies – about 4 out of 51 – are underinsured.

How much cover do you need?

One way to figure out how much insurance you need is to get a home and contents quote online. For most people, that’s the fastest way to estimate the amount of cover that’s right for them.

For a more complete understanding of your coverage requirements, you can also estimate your building and contents ‘sum insured’. That’s the term insurers use when referring to the maximum amount of money you’ll get back to rebuild or repair your home, or to replace or repair your home’s contents.

Your premium – that is, how much you pay for your insurance – is calculated based on this ‘sum insured’ amount.

Discover AAMI Home and Contents Insurance

How to estimate your home building cover

Drumroll… here are two ways you can estimate your sum insured cover:

  1. The cost per square metre approach. Measure the size of your house and use this square metre figure when talking to contractors who can estimate the build costs of similar houses in the area. However, this may not take into account actual building costs and building standards.
  2. The elemental approach. This process involves making a detailed assessement of your home. Considerations include the size of individual rooms, construction quality, features like lighting and air conditioning, and a range of other factors that can help you estimate your sum insured.

Our online home insurance calculator can make doing an elemental assessment easier. Keep in mind it won’t take into account all potential rebuilding costs, such as fees related to debris removal or the costs of architecture services or building permits.

How to estimate your home contents cover

Whether you’re a home owner or renter, contents cover can help you get back on your feet quickly if something unexpected, like a major fire, happens at your residence.

When estimating the contents cover you need, make an inventory of your belongings. Your contents can include everything from furnishings, white goods, clothing to electronics, sporting goods and jewellery. You can even get cover for portable items like your mobile phone, so they’re covered under your contents policy whether you’re at home or away.

Make your contents inventory as detailed as possible, with copies of receipts, serial numbers and photographs wherever possible.

Short on time? Try an online contents calculator to estimate your contents sum insured. This can give you a quick and reasonable estimate.

Getting a combined Home and Contents policy is a popular option and can save you money. For example, you could save up to 10% when you buy a new AAMI Home and Contents policy together. FYI, the discount doesn't apply to some options, including portable valuables cover.

How to avoid underinsurance

Underinsurance can happen for many reasons, like failing to increase your level of cover after a home renovation. To avoid putting yourself into a tricky financial position, check out these tips on how to avoid underinsuring your property.

If you’re unsure about the amount of cover you need or concerned your future circumstances will change, you may consider choosing a policy that offers complete replacement cover rather than a policy where you need to choose a sum insured.

AAMI Complete Replacement Cover is an Optional Cover available with AAMI Home or Landlord policies.

With this cover, we’ll repair or rebuild your house as it was, or pay you the amount of the assessed quote to repair or rebuild it, without you having to set a specific sum insured limit.

If you’re an AAMI customer, you can add Complete Replacement Cover to your AAMI Home or Landlord policy by calling us on 13 22 44 or by logging into your account.

For new customers, select the AAMI Complete Replacement Cover Optional Cover when you get an AAMI Home or Landlord Insurance quote. AAMI Complete Replacement Cover will automatically be added to your quote when applying.

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Insurance is issued by AAI Limited ABN 48 005 297 807 AFSL 230859 (AAI) trading as AAMI. Any advice has been prepared without taking into account your particular objectives, financial situation or needs, so you should consider whether it is appropriate for you before acting on it. Please read the relevant Product Disclosure Statement before you make any decision regarding this product. The Target Market Determination is also available.