How much you should insure home for in Australia is rebuild cost $500K to $1M for building plus contents $30K to $150K, not market value $800K to $1.5M including land $300K to $600K, with rebuild cost calculated via sum insured calculator $500K building plus $80K contents total $580K, costing $1,500 to $2,500 per year for building $1,200 to $1,800 plus contents $300 to $800. You should insure home for rebuild cost, also called replacement cost, which is cost to rebuild house same size and standard if destroyed by fire $500K, not market value which includes land $300K to $600K not destroyed, with rebuild $500K for average 3 bed house 150 sqm $2,500 to $3,500 per sqm = $375K to $525K plus demolition $20K, architect $10K, council $5K and accommodation $10K total $500K to $600K. For example, house market value $800K includes land $300K plus building $500K, you should insure building for $500K rebuild not $800K market value, overinsuring wastes premium $300 per year, underinsuring below 80% of rebuild $400K for $500K rebuild causes co-insurance penalty paying only 80% of claim $80K of $100K storm damage $20K out of pocket. Contents $30K to $150K includes furniture $10K to $20K, electronics $10K to $15K, clothing $5K to $10K, jewellery $2K to $10K, appliances $5K to $10K, total $80K for 3 bed house. So insure home for rebuild cost $500K to $1M for building plus contents $30K to $150K total $530K to $1.15M, not market value $800K to $1.5M, with sum insured calculator from insurer NRMA, Allianz, Budget Direct, costing $1,500 to $2,500 per year for $500K building plus $80K contents, with 80% rule requiring at least 80% of rebuild $400K for $500K rebuild to avoid penalty.
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