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Home insurance in Australia isn't a single product - it's a group of policies that cover different things:Building insurance: Covers the physical structure - walls, roof, floors, fixtures, fences, carport, and outbuildings. This is the policy your lender requires before settlemen
Building insurance isn't legally compulsory, but it's effectively mandatory if you have a mortgage - your lender requires it as a condition of the loan. Even if you own your home outright, going without building insurance means you bear the full cost of rebuilding after a fire, storm, or other disaster. For most Australians, this is not a step to skip.
Market value is what someone would pay for your property (land + building). Sum insured is purely the cost to demolish and rebuild the structure. Land value is excluded. For example, a home worth $800,000 at market value might only cost $350,000 to rebuild - your sum insured should be $350,000 (plus allowances for demolition and professional fees), not $800,000.
Since 2012, most Australian home insurance policies include flood cover by default, but check your Product Disclosure Statement (PDS) carefully. Some policies in high-risk areas may exclude flood, impose sub-limits, or charge high excesses. "Storm damage" and "flood damage" are defined differently - stormwater runoff may be covered under storm, but riverine flooding requires separate flood cover.
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