What to insure, and when
Cover that applies while you save, from the day you exchange contracts, and each year you own the property. What each policy does.
The Property Lifecycle
Nine stages, from saving a deposit to selling. The policies that apply at each one.
Saving for Deposit
Cover that applies before you buy protects your income while you save.
Income Protection
Covers up to 70% of income if you cannot work due to illness or injury. Keeps your savings plan going while you cannot work.
Trauma Cover
Lump sum payout on serious illness (cancer, heart attack, stroke). Can stop a serious illness using up your deposit savings.
Getting Pre-Approved
A broker assesses your borrowing capacity and prepares your loan application.
Find a Free BrokerSearching for a Property
Find suburbs within your price range on the map, then inspect properties.
Explore the MapMaking an Offer
A building and pest inspection happens before you exchange contracts. It reports defects in the property.
Building & Pest Inspection
Not insurance. Due diligence costing $400–$800 for a registered inspector. Without one, hidden defects may become your cost.
Going Unconditional
Once finance and other conditions are satisfied, the contract is binding. Most lenders require building insurance from this date.
Building Insurance
Covers the physical structure of the home against fire, storm, flood and other damage. Usually mandatory from the date contracts become unconditional. Required by all mortgage lenders.
Settlement & Moving In
You receive the keys. You now own the property and carry all its risk.
Contents Insurance
Covers your furniture, appliances, and personal belongings. Building insurance does NOT cover your contents. Typical cost: $500–$1,500/year.
Life Insurance / Mortgage Protection
Pays out the remaining mortgage balance on death or total permanent disability. Means your family keeps the home without the mortgage debt.
Renting Out Your Property
Standard building insurance is not enough for a rented property, whether an investment or a rented room.
Landlord Insurance
Covers rental income loss, malicious damage by tenants, liability, and legal costs. Standard building insurance excludes tenant-related damage. Relevant to any investment property.
Strata Insurance
For apartments, the body corporate holds a strata insurance policy covering the building structure and common areas. Your personal contents and fixtures inside your unit are NOT covered. Contents insurance covers those separately.
Ongoing Ownership
Property values and rebuild costs change each year. An annual review keeps your sum insured in line.
Annual Review
Review your sum insured amount each year to reflect current rebuild costs: not the market value of the property, which includes land. Rebuild costs typically rise with construction costs (often 5–10% per year).
Selling
Selling an investment property can trigger capital gains tax. Calculate it before settlement.
Capital Gains Tax
When you sell an investment property, CGT applies to the profit. If held more than 12 months, you receive a 50% discount. Your main residence is exempt.
Insurance Types Explained
Who each policy is for, its typical annual cost, and what it covers.
Building Insurance
All homeowners with a mortgageCovers the physical structure of your home against fire, storm, flood, and accidental damage. Required by all Australian mortgage lenders from the date you go unconditional.
Tip: Insure for the rebuild cost (not the market value). A quantity surveyor estimate gives an accurate figure.
Contents Insurance
Homeowners and rentersCovers your furniture, appliances, clothing, and personal belongings. Building insurance never covers contents. Owners and renters both need this separately.
Tip: A home contents inventory before applying shows what to insure and for how much.
Landlord Insurance
Investment property ownersCovers rental income loss, malicious tenant damage, liability claims, and legal expenses. Building insurance alone does not cover these risks for a property with tenants.
Tip: Policies differ on cover for "intentional damage" vs "accidental damage" by tenants. Compare both.
Income Protection
Anyone with a mortgage or dependantsTypically replaces up to 70% of your income for a specified period if you're unable to work due to illness or injury. Protects your ability to make mortgage repayments.
Tip: Waiting periods are 30, 60 or 90 days. A longer waiting period lowers the premium.
Lenders Mortgage Insurance (LMI)
Buyers with < 20% depositProtects the lender (not you) if you default. Required when your LVR is above 80%. Can be rolled into the loan. Avoidable for eligible first home buyers under the 5% Deposit Scheme.
Tip: LMI is tax deductible for investment properties, claimed over 5 years or the loan term (whichever is shorter).
Strata Insurance
Apartment / unit ownersThe body corporate holds strata insurance covering the building structure, common areas, and common property fixtures. Your unit's internal fixtures and all contents are NOT covered.
Tip: The strata insurance certificate of currency shows what is and is not covered. Request it before buying an apartment.
Compare insurance providers
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General Advice Warning
The information on this site is general in nature and does not consider your personal circumstances, financial situation, or needs. Before acting on any information, you should consider its appropriateness having regard to your own situation and seek professional advice from a licensed financial adviser, mortgage broker, accountant, or solicitor.