Calculating the cost of home insurance before you buy

Buying or building a home is an exciting time! It’s also, well… it’s expensive. Between inspections, settlement costs and mortgages, you’ll fork out some hefty fees.

One cost many new homeowners don’t consider, however, is home insurance. Factors like your new home’s location, its fittings, and even the type of property it is can affect the price of home insurance. So, what’s often left as an afterthought could be considered a key part of the decision-making process.

3 factors that can influence the cost of your home insurance

The area you’re moving to

Location is obviously one of the biggest considerations in the real estate game. But it goes beyond your proximity to public transport, schools, and your favourite bars; where you live can affect how much you’ll spend on home insurance.

For starters, an area with a high crime rate may be considered higher risk, and increase your likelihood of needing to make a claim sooner or later. Buying or building in an area where home invasions and burglary are more common not only goes against common sense, but could impact your dollars and cents.

Another factor, particularly in Australia at the moment, is how at-risk you are for flooding, bushfires, and other natural disasters. Check whether your insurer, or one you’re considering, provides cover for these things. You can also get a quote based on a property you’re considering – or multiple similar properties in different areas if you want to get a sense of how differing risk level can impact insurance premiums.

Suncorp Insurance, for example, includes flood cover for all Home and Contents Insurance policy holders, whether you’re in a known flood-risk area or not. Damage by storms, bushfires, and tsunamis are also covered, as long as you’ve had a policy for more than 72 hours. It’s all part of Suncorp’s Natural Disaster Response Plan.

Learn more about Suncorp Home Insurance

Fittings and furnishings on your property

There are certain features and fittings that, when installed on your property, can decrease your risk of having to make a claim.

These include:

• Alarm systems
• Key-operated locks
• Windows fitted with security screens
• Secure entrance with electronic swipe card or FOB, and
• Smoke detectors monitored by a security provider.

Of course, when buying or building a home you can add many of these features yourself. Still, it can be worthwhile calculating how much it will cost to do so, versus finding a property that is already fitted out with them. It’s also worth checking if there’s going to be any major roadblocks to installing more modern security systems, especially if you’re purchasing a property that’s a bit older.

As well as amping up your home security, it’s a great idea to prepare for natural disasters, especially in high-risk areas. Suncorp has a checklist for preparing your home for natural disasters, to potentially lower the damage of floods, storms, bushfires and more.

Age and structure of your home

While it may be tempting to buy and renovate that beautiful 1970s art deco classic, think about what impact that could have on your home insurance premium. That’s not to say that only modern properties have the structural integrity to save you some dough, but certain factors can make a difference.

If you’re unsure, consider having an expert inspect your potential new digs. They can look out for any risk factors that your insurance provider may also flag. This can include the materials your home is made from, and how likely it would survive in a storm or other natural disaster.

Using a home insurance calculator to work out costs

Aside from all of these factors, you can also use free online calculators to work out the potential cost of things like rebuilding your property or replacing your belongings.This can be useful to know when you’re determining how much insurance you need to adequately cover your home and contents.

Suncorp Insurance has two home insurance calculators available online for anyone to use:

• Contents calculator: use this to estimate the amount of cover you may need for your belongings.
• Buildings calculator: use this to estimate how much it would cost to replace your home.

It’s important to know that these are only a guide, and won’t give you an exact idea of how much your premium will be. For that, a quote is usually more helpful. You can get a free quote online from Suncorp Insurance, in a matter of minutes. This can help you make a more informed decision, particularly if you’ve already got your heart set on a certain property. The quote will ask for details such as the address of the property you want to insure, and how you intend to use the property (ie as a rental, to live in yourself, etc.). So before you get a quote, it’s good to at least have an idea of how to answer these questions.

Get a Home Insurance quote

Read more:

• How to make a home insurance claim with Suncorp Insurance
• Insurance before settlement: Do you need it?
• How to create and protect your home office

Insurance is issued by AAI Limited ABN 48 005 297 807 trading as Suncorp Insurance. Consider the Product Disclosure Statement before making a decision about this insurance. The Target Market Determination (TMD) is also available. This advice has been prepared without taking into account your particular objectives, financial situations or needs, so you should consider whether it is appropriate for you before acting on it.