What does home and contents insurance cover?

Last updated: September 2026

Key takeaways

• Home and contents insurance covers two different things under one policy: the building, and what's inside it
• Contents insurance generally covers your contents in your home for events such as but not limited to fire, storm and escape of liquid 
• Contents usually means items you'd take with you if you moved; built-in fixtures are generally treated as part of the home
• Common exclusions include wear and tear, poor maintenance, and gradual deterioration
• Setting, and regularly revisiting, an accurate amount you want to be insured for (sum insured) is the best way to avoid a shortfall if you need to make a claim

Buying a home, or filling one with things you love, is usually followed by a practical question: what happens if something goes wrong? Home and contents insurance was created to answer exactly that.

Home and contents insurance covers two different things under a combined policy. Home insurance pays to repair or rebuild the structure, while contents insurance pays to replace what's inside it. Which one you need, and how much you are covered for, comes down to your individual circumstances.

What does contents insurance cover?

Contents insurance covers the belongings inside your home against loss or damage from insured events such as fire, storm or theft. You set a sum insured when you take out the policy, and that figure is the most your insurer will pay. You can get contents insurance on its own or combine it with building cover in a single home and contents policy.

Depending on the policy, contents insurance may cover loss or damage caused by insured events such as:

• fire, lightning and explosion
• storm, flood and other natural disasters, such as an earthquake
• theft, attempted theft and malicious damage or vandalism
• the sudden bursting or leaking of water or another liquid
• impact damage, caused by a falling tree or branch

Which events are included, and the limits that apply to each, vary between products.

What counts as contents?

The general test is whether you'd take the item with you if you moved. Contents usually include:

• furniture, rugs, curtains and internal blinds
• appliances that aren't built in, such as a fridge, washing machine or television
• clothing, bedding and linen
• electronics, including laptops, phones and gaming consoles
• tools, sporting equipment and outdoor furniture
• jewellery, watches and other valuables, often subject to a per-item limit
• some floor covering, such as carpets, carpet tiles and floating floors

Some insurers, including Real Insurance cover fixtures under contents where the insured is an owner occupier of a strata titled property. Check your PDS for clarity on what counts as contents.

Built-in items such as a fitted kitchen and fixed wardrobes are generally treated as part of the building, not the contents.

What is the difference between home and contents insurance?

Home insurance and contents insurance actually answer two different questions. One asks what it would cost to rebuild the structure; the other asks what it would cost to replace everything inside it.

If you're weighing up your options, it's worth taking the time to review the different types of home insurance products, or looking at a combined home and contents insurance policy if you need both types of cover. You should consider the Product Disclosure Statement (PDS) and Target Market Determination (TMD) to help decide which option may suit you best.

What is not covered by contents insurance?

An exclusion refers to an item, event or circumstance that an insurance policy will not cover. Common exclusions include:

• general wear and tear, rust, mould and gradual deterioration
• damage caused by a lack of maintenance
• loss or damage while the home has been unoccupied for a certain period of time
• items taken outside the home, unless portable contents cover has been added

If an item exceeds the per-item limit listed in your PDS or Certificate of Insurance, any amount above that limit may not be covered.

The exclusions that apply to your own policy are listed in the Product Disclosure Statement (PDS).

How much contents insurance do you need?

The reliable way to determine how much contents insurance you need is to work through the house room by room and add up what it would cost to replace each item, rather than estimating in a single guess.

If the value is set too low, you could be caught short at claim time. That's what underinsurance means.

It’s worth reviewing your sum insured at each renewal and after renovations or major purchases, as rebuilding and replacement costs can change over time.

Where can you get a contents insurance quote?

Real Insurance offers home and contents insurance options that include contents, home and combined home and contents insurance, along with optional extras you can add to suit your circumstances. Get a quote in minutes here. Consider Product Disclosure Statement (PDS) and Target Market Determination (TMD) to decide whether the product is right for you.

Frequently asked questions

Do renters need contents insurance?

If you're renting and want cover for your own furniture, electronics or other belongings, you need to take out your own contents insurance, since a landlord's policy typically covers the building, not the tenant's belongings.  

Does contents insurance cover items taken outside the home?

Standard contents insurance generally only covers belongings inside the home, so items you take with you – like a laptop, phone or jewellery – usually aren't covered once they leave the property. If you want cover away from home, check whether your insurer offers portable contents cover as an optional extra.

Does contents insurance cover accidental damage?

It depends on the product. Some contents insurance includes accidental damage as standard, while others only offer it as an optional extra you can add. Check your Product Disclosure Statement (PDS) to see whether accidental damage is included or needs to be added.

What is underinsurance?

Underinsurance is when your sum insured is set lower than what it would actually cost to replace your belongings or rebuild your home. If you're underinsured and need to make a claim, you may not receive enough to cover the full cost, leaving you to pay the difference yourself.

Does contents insurance cover storm and flood damage?

Many contents insurance policies cover storm and flood damage as standard, but this isn't universal, and some insurers treat flood as a separate, optional type of cover. Check your PDS to confirm exactly how your policy defines and covers these events.