Your home insurance covers damage and/or loss to a building you own (noting it doesn’t include the contents within the home). The policy allows you to re-build or repair your home after damage is caused by an event outside of your control, such as storms and bushfires.
Essentially there are two home insurance types: total replacement cover and sum insured cover. While a total replacement policy will include all costs to rebuild your home to its current specifications, most commonly home owners choose the sum insured option which includes cover up to a set amount. Importantly, as per all policies, your home insurance cover will have limitations, exclusions and disclaimers, which your Loan Studio advisor will explain to you in detail.
For areas with increased risk of flood, bushfire or cyclone, you may be required to obtain a higher level of home insurance. It is important that you are confident your level of cover is suitable for your needs and location to protect you against under insurance in the event of a natural disaster.