Property owners are often aware of the risks to their home and take out insurance to cover their property, for things like fire, storm and flood. However, the difference between building and contents insurance can be a little confusing, with owners unsure if they need either or both, so we’ve put together a handy guide to help you understand the key points of each.

Home insurance and building insurance are the same thing, and it covers a dwelling, outbuildings like garage and sheds that are lockable and items that are permanently attached or fixed, like built-in robes or bathroom fixtures.

Contents insurance covers everything else that isn’t a permanent part of the home, like furniture and appliances. Both types of insurance protect against events or issues like flood damage or fire, and a building and contents policy combines the two types of cover.

However, it’s important to remember that contents cover doesn’t always cover everything that you might think. There will likely be limits in place in your policy, and items over that figure will be required to be listed separately.

For those in high-rises or apartment complexes, building insurance is generally unlikely because the strata will have its own insurance.

One of the most common questions asked about building or contents insurance is the price. The short answer is that it varies – each provider will have their particular ways of determining the cost of an insurance policy based on risk factors, property values, the suburb of the property and so on. Given the wide range of variables, the cost of each policy will vary.

Contents insurance will vary as well, mostly because it depends on the individual risk associated with the property and what the policy will cover. Determining the value of the items in your home can be a mammoth task. An easy way to figure out how much you would want to insure is to determine how much it would cost to replace everything in the home – and some outsourced providers offer this service.

As to whether or not to use an insurance broker, it can be tempting to use online reviews or comparison systems. However, with high-risk weather events on the increase and for people living in cyclone or flood-prone areas, an insurance broker will likely be able to provide better cover than going through an online provider.