When setting up home insurance, one of the most confusing aspects can be understanding what’s covered under building insurance versus contents insurance. Let’s clarify this important distinction.
Building Insurance Coverage Your building insurance typically covers permanent fixtures that are part of your home’s structure, including:
- Built-in electrical appliances that are permanently wired
- Fixed wall, ceiling, and floor coverings
- Permanent gas appliances connected to the supply
- Floating wooden floors
- Solar panels and satellite dishes
- Built-in swimming pools and spas
- Outdoor permanent structures like garages and carports
- Garden borders and sealed pathways
- Fixed water tanks
Contents Insurance Coverage Contents insurance covers your moveable belongings and items that aren’t permanently attached to the building. However, there’s an important distinction for tenants: if you’re renting a house (not a unit), contents insurance also covers items you own that are permanently attached to the property, provided they’re primarily for domestic use.
Gray Areas and Special Considerations Some items can fall into gray areas:
- Linoleum flooring is covered under building insurance whether it’s permanently attached or not
- Uninstalled building materials are covered under building insurance, but only when stored in a locked and secured building on the property
- Items used for business purposes have specific limitations and may require additional coverage
Important Exclusions Both policies have specific exclusions:
- Strata title buildings have different requirements
- Buildings under construction aren’t covered under standard building insurance
- Common property areas aren’t included in coverage
- Normal wear and tear isn’t covered under either policy
Understanding these distinctions helps ensure you have the right coverage for your needs. Always review your policy documents carefully and consider seeking clarification from your insurer for specific items you’re unsure about.
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