Buying a new house is possibly the single largest investment you will ever make, so it is important to protect that investment with the right insurance.
This guide explains the type of insurances available and if they are required when buying a house.
Life Insurance is designed to help your family cope financially if you die. The main reason for buying life insurance is to ensure that your mortgage would be paid off in the event of your death. It offers peace of mind to you and your family knowing they will not be burdened with a debt they are unable to pay.
Do I need it? It is not mandatory, however we highly recommend taking out life insurance to cover the amount of debt you have for your home.
Building insurance covers the cost of repairing or rebuilding your home if it is damaged or destroyed. It should cover areas such as floors, roof, walls, fitting and fixtures such as kitchens and bathrooms and outside buildings such as sheds and garages.
Typically you will be protected against events such as:
- flood and water damage
- lightning damage
- Vandalism or malicious damage
Do I need it? Proof of insurance is usually required by the lender as part of the lending process – check with your lender. Either way, building insurance is a great idea to protect your investment.
Contents insurance is designed to cover you against loss or damage of your personal possessions, such as furniture, clothing, jewellery and electrical items.
Many insurance providers can combine building and content insurance in the one package (often referred to as Home and Content Insurance).
Do I need it? Contents insurance is not mandatory and you do not need it to secure a home loan. However it does provide peace of mind in the event of loss or damage to your household contents.
Other types of insurance
If you are not going to live in the house, but instead will be renting it to a tenant, you will require Landlord Insurance. Landlord Insurance covers the owner of the property from damage caused by the tenant. It can cover damage to the building as well as fittings and fixtures such as carpet, curtains, light fixtures and built-in cupboards. It can also cover loss of rent if the tenant defaults.
Residential Stata Insurance
Residential strata insurance (also known as body corporate cover) is general insurance that covers common property under the management of a strata title or body corporate entity. Owners of strata titles typically share the premium costs of strata insurance as part of their strata fees and liabilities. Strata insurance is mandatory and must also provide public liability covering people that may be injured on common property.
If you are buying a new house, Hunter Lending Solutions can assist and advise on your insurance requirements. Contact us today for a confidential chat.