Your browser version is no longer supported, so you may experience issues while using this site.
Please upgrade to a current browser to enjoy the best experience.

Should you get complete replacement cover home insurance?


Darryl Kerrigan hit the nail on the head when he said about his beloved property, “It’s not a house. It’s a home.”1 It’s true that, though a house is a physical structure, a home is a place that contains things – photographs and mementos, for example – that can be tricky to put a value on.

What is total replacement cost homeowners insurance?

Total replacement cost insurance provides you with enough cover to rebuild your house to the same condition it was in before an insured event. “Insured event”, by the way, means whatever happened to your home that left you needing rebuilding and that we cover. It could be lightning, fire, or even a meteorite strike (sure, it’s unlikely, but stranger things have happened). If you ever have to make a claim, your insurer will need to assess your property to determine if it’s a total loss. So, you may have to wait to receive the money you need before you start rebuilding.

Only a handful of insurers, like AAMI, offer total replacement cover. Our Complete Replacement Cover (CRC) is an Optional Cover for AAMI customers. This level of cover can give you peace of mind that we'll repair or rebuild your home as it was, or pay you the amount of the assessed quote to do so, without you having to set a specific sum-insured limit.

Should you get Complete Replacement Cover home insurance?

Maybe you’ve been renting for a while and you’ve just bought your first home, or you’re finally living in the house of your dreams after working hard for it. No matter your situation, total replacement cost homeowners insurance might be worth considering to cover your castle from the unforeseen.

Ultimately, the decision to get total replacement cost insurance is an individual one. It will come down to several factors, including the overall value of your home, any existing insurance you currently have and your risk of being underinsured.

Total replacement cost vs sum-insured cover

Unlike total replacement cost cover, sum-insured cover will insure your home to an amount specified by you. It’s standard with most home and contents insurance policies. One of the benefits of sum-insured cover is that a claim can usually be settled quickly, often once your insurer has confirmation of your loss. However, sum-insured cover can also increase your risk of being underinsured. This could happen if the cost of rebuilding your home or replacing your contents is higher than estimated. If your estimate comes in higher than your insured amount, you may have to dip into your own pocket for your rebuild or settle for a rebuilt home that’s not quite up to the standard of your old one.

Ways to avoid underinsurance

Underinsurance occurs when you don’t have enough insurance to rebuild your home, or recover your contents, after an event like fire or theft. It’s fairly common, too – approximately 50% of Australian’s don’t have adequate cover for their assets.2 If you’re concerned about being underinsured, there are a few things you can do to avoid it:

  • Make sure your policy is up to date, and that you know what is and isn’t covered by it.
  • Update your policy to include any additions to your home, such as renovations or fancy inbuilt appliances.
  • Assess the value of your home and contents accurately.

If you're an AAMI customer you can keep your policy up to date through the AAMI App. You can use it to see your policies in one place, update your details and make or manage any claims.

Learn more about the AAMI App

Compare replacement cost home insurance policies

To ensure your house is covered in an unexpected event, home building insurance might be right for you. Remember to check what coverage is included, and whether items attract a cap on the amount you can claim.

With AAMI Home Building and Landlord Insurance policies, you can add Complete Replacement Cover as an Optional Cover. Instead of setting a sum-insured limit on your home or investment property, we’ll repair, rebuild your house as it was, or pay you what it would cost you to do so if an insured event occurs. Rest easy with total cover for loss or damage at your property.

Discover AAMI’s Exclusive Complete Replacement Cover


1 Rob Sitch, The Castle (Village Roadshow: Australia, 1997)

2 The Conversation, Insurance is unaffordable for some, but it’s middle Australia that is underinsured, accessed 18 July 2019

Read more:

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.