Your home insurance premium can differ for several reasons – not least of all property type. When it comes to deciding between a house and an apartment, here’s what you need to apprehend about the cost of insurance.
Home and contents insurance has numerous variables. What you need to pay can be impacted by the location, size and type of your home.
A budget
The first thing all prospective home buyers should do is make a budget – that is, figure out what you can afford. However, it’s important to look beyond house price to consider additional costs, such as lenders mortgage insurance (LMI), the cost of moving, potential renovations, council rates, strata fees, and home and contents insurance.
Your insurance costs will be different for an apartment or a house, so getting a quote early will allow you to include it in your budget comparisons.
Property type: House v apartment
Apartments and houses have different insurance requirements. Namely, if you have a standalone home and property, you will more than likely need home or building insurance.
If you live in an apartment, your strata may cover the insurance of the building as well as other features inside and outside your walls, like shared gardens.
House or land size
Choosing the size of your home comes down to your needs. Do you need a certain number of bedrooms? Can you afford a larger home? Do you want acreage or a sizeable yard? If you purchase an apartment, generally, the body corporate will buy the buildings insurance and you’ll just need contents insurance.
When it comes to insurance, house or land size will affect your premium, but mainly concerning the sum the property’s insured for.
Therefore, your large property in the countryside may not cost as much insurance-wise as a smaller property in the city.
Location secrets
Location is also decided by your wants and needs. You may love country life or thrive in the heart of the city. However, there are specific aspects of your neighbourhood that influence your insurance premiums. For instance, if your property is near a train station or public park or at a higher than average risk of bushfires or floods, it can hike up insurance premiums.
Insurance costs can vary depending on the risks in the area. This can include anything from local crime rates to flood risk and proximity to bushland.
As always, it’s best to consider the best insurance type for you and your purchase and seek professional advice.