How to tell if you’re properly insured

close up photograph of a house key

RACV Staff

Posted October 25, 2021

Underinsuring your home is one of the biggest and costliest mistakes you can make. 

The worst time to find out you haven’t got enough insurance is when you need it – that ‘oh no’ moment when a storm sends a tree crashing through your roof or you arrive home to find your treasures have been ransacked.

While the task of painstakingly going through the entire contents of your house and calculating what it would cost to replace – from your saucepans to your designer shoes to your stone benchtop – can be laborious, the cost of not doing it properly can be dire. 

What you need to know about building and contents insurance

RACV’s head of home insurance Zoe Malempre says many things can damage your buildings, including natural disasters such as bushfires and storms. While your contents are at risk from similar dangers, there is also the risk of burglary and vandalism.

Yet when the worst happens, many people find that they are underinsured, in other words they do not have sufficient insurance to cover the cost of rebuilding and replacing their home and possessions to the same standard. 

According to the Insurance Council of Australia, four out of five Australian home owners don’t have enough insurance to cover the true value of their home and contents should disaster strike. And two out of three renters have no insurance at all to cover their contents.

“From talking to RACV members we believe two key reasons for underinsurance is that many forget to appropriately insure items around their home, and they also forget to update their insured values to reflect today’s full replacement values,” says Malempre. 

So how can householders make sure their insurance cover accurately reflects the true value of their house and all the things inside it that make it a home?  

Understand the difference between your building and contents

There are two types of insurance to consider when thinking about protecting your home and belongings: building insurance and contents insurance. Insurance Council spokeswoman Lisa Kable has a simple trick to visualise the difference between home and contents insurance.

“Imagine you could pick up your house, flip it upside down and shake it,” she says. “What falls out is the contents and what is in your hand is the building or home.” 

Use a calculator

A simple way toestimate what it might cost to rebuild or repair your home in the event of a disaster or damage is to use RACV’s home building calculator*, which takes into account factors such as when your home was built and to what standard.

Zoe says what you think it might cost to rebuild or repair a house and the actual cost are often miles apart. For example, a replacement build must meet the latest building codes including higher standards for energy efficiency. “The costs can add up,” she says. 

It’s also important to remember to include outbuildings such as garages and carports or garden landscaping and pools.

It’s also important to consider interior finishes. Are your bathroom tiles lavish marble or basic ceramic? 

The RACV building insurance calculator takes into account the number of rooms, ceiling heights and whether the house is single or multi-storey. The bigger the house, the more it costs to rebuild.


kitche table and bench damaged from a house fire

Speak to a professional to help determine which home and contents insurance package is best for you.


Crack the code

Changes in building codes and planning zones, especially following a natural disaster, can significantly increase the cost of rebuilding or repairing a house, with the result that people end up with insufficient insurance. A quick check on, an online portal which has detailed information on properties across Victoria and New South Wales, will reveal zoning information about your particular property, such as whether it is in a bushfire zone, and therefore subject to stringent – and more expensive – building codes.

Take stock of your belongings – and their current market value

Regardless of whether you are a home owner or renter, an accurate assessment of the value of all the contents in your home is crucial when calculating your insurance cover. Lisa says you really do need to spend time adding up everything from the luxury sheets to those antique teaspoons. You may have to set aside a weekend to walk through every room in your house, searching online what each item would cost to replace. 

The Insurance Council’s Understanding Insurance website provides a household inventory checklist to which you can refer.

Alternatively, RACV’s home contents calculator can help you make an accurate assessment without as much legwork. You will still have to note big-ticket items but the calculator makes estimates based on such things as the number of occupants and size of the house.

It also takes into account the number of bedrooms, living areas, bathrooms and other rooms as an indication of the size of the home, as well as the extent of furniture in each room. The bigger the house and the more furnishings you have, the more likely you will have a higher value of contents to insure.

And don’t forget to consider the standard of your contents. Do you have designer-brand clothes or just basic daywear, and do you wear costume jewellery or valuable heirlooms?

For detailed information about your property, including zoning, heritage overlays and other factors that may impact on rebuilding costs, visit


fallen tree on front room of house

Always ensure you're insured.

Five things to remember when estimating your contents insurance


List individual jewellery items and other valuables 

Depending on your policy, there may be standard limits on valuable items such as jewellery, art and watches. You may need to specifically list these.

Consider accidental damage

Accidents happen. Accidental damage cover insures for incidents like a child throwing a cricket ball inside and smashing your expensive TV, or denting a wall while moving furniture.

Cover for items outside the home 

Think about taking extra cover for devices such as laptops and smartphones to insure them outside the home. 

Remember sports gear 

Bicycles, golf clubs and other items add up to a substantial amount to replace so include them in your contents policy.

Check the wardrobe

Clothes and shoes will set you back a considerable amount to replace. Remember that you’ll have to buy them new and may not be able to wait for the next sale.



*Rebuilding and replacement costs estimated by RACV’s building and contents calculators are a guide only and it is your responsibility to make sure your buildings and contents are insured for the full replacement value (including any GST).

The information provided is general advice only. Before making any decisions please consider your own circumstances and the Product Disclosure Statement and Target Market Determinations. For copies, visit As distributor, RACV Insurance Services Pty Ltd AFS Licence No. 230039 receives commission for each policy sold or renewed. Product(s) issued by Insurance Manufacturers of Australia ABN 93 004 208 084 AFS Licence No. 227678.