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Congratulations, you’re about to purchase your first property and you’ve just started looking into insurance options to cover your exciting new investment. If you’ve found yourself assuming that “building insurance” and “home insurance” mean the same thing, you wouldn’t be the first.
“When it comes to home insurance, the terminology can sometimes be confusing, especially for first-time buyers,” agrees Mervyn Hartley, Youi’s Head of Product for Home Insurance.
“That’s because in Australia, ‘building insurance’ and ‘home insurance’ are often used interchangeably – but it’s important to know that they don’t always refer to the same type of cover.”
Understanding how these two types of insurance differ – and where they overlap – can help make it easier for you to choose cover that meets your unique needs and situation.1
So, when is building insurance the same as home insurance, and when do they differ? What do these different policies cover? And is one better suited than the other if, for example, you’re a landlord or a renter rather than an owner-occupier?
You can learn the answers to all this and more in this helpful guide to building vs home insurance.
Is building insurance the same as home insurance?
Not really. Building insurance is a form of home insurance designed to cover the physical structure of your property,2 whereas the term ‘home insurance’ is commonly used to refer to a range of policy types, such as contents insurance or combined building and contents policies.
“Put simply, building insurance covers things like walls, roofs, garages and permanent fixtures. Home insurance, on the other hand, is often used as a broader, umbrella term that may refer to combined cover for both the building and the contents inside it, depending on the policy,” explains Hartley.
During your research, you might also come across some more specialised home insurance varieties. These typically sit within the broader category of home insurance and cater to specific customer segments.
“For example, Youi contents insurance for renter’s is cover designed specifically for tenants who are renting a property temporarily or long term,” says Hartley. “Meanwhile, our landlord insurance still falls under our home insurance product but is designed to offer landlords some additional features.”
We’ll go into landlord insurance in more detail later on, but for now let’s take a closer look at building insurance vs home insurance to learn more about the nuances of home insurance.
What does home insurance cover?
“That depends on the type of home insurance policy you’re talking about,” says Hartley.
To recap, the three main types of home insurance are:
- Building insurance. Typically covers your home’s building structures and permanent fixtures for events including fire, storm, flood, explosion, intentional damage, earthquake and impact, such as that caused by a falling tree or a car.2
- Contents insurance. Covers personal belongings inside your home, such as furniture, electronics and clothes, and may cover you for damage from events such as theft, intentional damage, storm, flood, fire, lightning and earthquake.3
- Building and contents insurance. A combined policy that bundles both of the above covers together4 and may cost less than purchasing each policy separately.3
“At Youi, we use the term ‘home insurance’ to refer to combined Building and Contents cover. This is because it encompasses the physical structure of your home and your personal belongings, such as furniture, appliances and clothes” says Hartley.
“But other insurers may use it differently – and knowing the difference can help you understand exactly what a policy does and doesn’t cover so you can compare options accurately before you buy.”
What does building insurance cover?
“Building insurance typically covers the physical structure of your property,” says Hartley.
This type of insurance can help with the cost of replacing or repairing your home or investment property if something goes wrong as a result of an insured event.5
Building insurance might also cover other permanent structures and permanent fixtures and fittings at your property, such as garages, fences, sheds and fitted kitchens.2
However, it’s a good idea to check how an insurer defines “home” or “building” for each policy you’re considering, as classifications may differ. For example, an insurer may include cover for inground pools but exclude above-ground pools, or they may not cover a granny flat if it’s being rented out.5
“At Youi, for example, our building cover includes permanently attached fixtures and fittings such as solar panels, ducted air conditioning units and kitchen cabinetry. But it doesn’t cover unsealed or unpaved driveways, plants or lawn,” says Hartley.
“Our standard building policies for owner-occupiers also don’t cover any household contents items, which at Youi includes fitted carpets and curtains. If you want cover for those things too, you may wish to look at adding a contents policy.”
Building insurance vs home insurance: Make the comparison
Still not sure about the best cover for your needs? We’ve put together this handy table, so you can compare Youi’s standard building vs home insurance cover at a glance.
| Youi Building insurance | Youi Contents insurance | Youi Building and Contents insurance (home insurance) | |
| Your home’s main building6 | ✔ | ✔ | |
| Attached structures, such as sheds and granny flats6 | ✔ | ✔ | |
| Roofs and ceilings6 | ✔ | ✔ | |
| Windows and doors6 | ✔ | ✔ | |
| Fitted kitchens and cupboards6 | ✔ | ✔ | |
| Garages and paved or sealed driveways6 | ✔ | ✔ | |
| Fences6 | ✔ | ✔ | |
| In-ground swimming pools6 | ✔ | ✔ | |
| Your personal possessions, such as clothes and furniture6 | ✔ | ✔ | |
| Integrated appliances that aren’t hard-wired6 | ✔ | ✔ | |
| Fitted carpets, curtains and blinds6 | ✔ | ✔ | |
| Home office equipment6 | ✔ | ✔ | |
| Relocatable swimming pools, saunas and spas6 | ✔ | ✔ | |
| Food and medicine6 | ✔ | ✔ |
For property owners seeking a little more security, some insurers also offer optional cover, which you can request to add to your policy for an additional fee.7
For example, Youi offers a range of optional covers that can be added to home insurance policies. You can request cover for business items, such as tools or tech; contents in commercial storage, for belongings you have stored in a commercial facility; and accidental damage, for unexpected mishaps such as damaged ceilings or broken TV screens.8
Do I need building insurance if I already have home insurance?
Not sure if your building is covered by your current home insurance policy? If you have an existing home insurance policy, your building might already be covered, unless your insurer uses the term “home insurance” to refer to contents-only policies.
“Because the term ‘home insurance’ can be so fluid in Australia and refer to many different types of policies, it is important to check the actual policy details on your policy documents, so you know exactly what you are and aren’t covered for,” says Hartley.
Who needs building insurance – homeowners, landlords or strata?
So, when might you be required to have building insurance in place? Let’s examine three common scenarios to find out.
Do homeowners need building insurance?
In Australia, homeowners aren’t legally required to have building insurance.9 However, if you’re taking out a mortgage, your home loan lender may require you to have home insurance as a condition of your loan.9
Even if you don’t need building insurance, you may still want to consider it, as your home is an important and valuable asset.2 If you own an apartment, your building may already be covered. We address this in more detail below.
Do landlords need building insurance?
Just like owner-occupiers, landlords aren’t legally required to have home insurance in Australia.10 However, mortgage lenders may require you to have it as a condition of your home loan.10
“If your property is a rental, you could explore insurance options for landlords, such as Youi landlord insurance,” suggests Hartley.
“This type of policy is designed to provide cover for your investment and includes building insurance as well as cover for loss of rent11 and landlord’s furnishings.”12
And, if you’re renting out your holiday home – for example, on Airbnb– you could also look into holiday rental insurance options.
Do strata properties need building insurance?
If you live in a strata building, for example a row of townhouses, your building’s structure and shared areas are legally required to be covered by body corporate insurance. This is typically covered by your body corporate fees and levies.
Strata insurance may not cover improvements or upgrades you make inside the unit, such as new carpets.13 The responsibility to insure can sometimes shift to the owner so you may wish to check your building’s by-laws, or rules, to see if that type of responsibility applies to you.
Do renters need building insurance for their furniture or personal belongings?
Renting your home? Building insurance isn’t something you have to worry about, as that’s your landlord’s responsibility.5 However, your landlord’s policy is unlikely to cover contents that belong to you.14
“This is where taking out your own contents policy, such as renter’s insurance, might help,” says Hartley.
As a tenant, a renter’s insurance policy can cover you for the things in your home that you own, such as clothes, furniture, jewellery, electronics and appliances, if they’re damaged or lost in an insured event.15
If you’re unsure if insurance is right for you, consider how long it might take you to save up if you had to replace every item in your home.15
“It’s easy to underestimate how much ‘stuff’ we really have, which can sometimes make insuring our belongings seem less of a priority.,” says Hartley.
“But once you start looking around at all your possessions – including furniture, decor, televisions, clothes, appliances and so on – things can add up quickly, so it could be a good idea to take some time to consider what could happen if you had to replace it all suddenly.”
How does building cover work for apartments?
As mentioned above, if you own an apartment or townhouse, you may not need to take out your own building insurance, as this is usually the responsibility of the body corporate.5
Strata insurance requirements and inclusions can vary between states and territories,16 but in addition to covering the building’s structure and common areas, a body corporate insurance policy could cover damage to elements such as:13
- Windows and doors
- Internal walls, ceilings, cornices and skirting boards
- Fixed tiling
- Sinks, toilets, baths, shower screens and fixed vanities
- Ovens and cooktops
- Built-in cupboards and fixed kitchen cabinets.13
However, there are some things body corporate insurance may not cover – for example, curtains, blinds, temporary wall or ceiling covers and appliances that aren’t wired or plumbed in, such as dishwashers and clothes dryers.17 And, of course, it won’t cover your contents and personal effects.17
“This is where apartment contents insurance might come in handy, helping you bridge the gap between what is and isn’t covered by your body corporate’s insurance,” says Hartley.
Does building insurance cover flood damage and water leaks?
Whether your property is located in a rural area, the suburbs or even the city, it could be at risk for flood damage. But does building insurance cover floods?
That depends on your insurer. Different policies might include flood insurance as standard, offer it as optional cover or not offer it at all. So, it’s a good idea to review your policy to find out more.
“Youi building insurance includes flood cover as standard, but as with many other policies, waiting periods do apply,” explains Hartley.
“Youi applies a 72-hour waiting period for flood cover when you first purchase a policy. Checking your insurance early can help ensure you have the right cover when you need it most.”6
Worried about water leaks or a burst pipe? While insurers typically include cover for loss or damage from escaping water as a standard inclusion, many policies only cover sudden and accidental escape of liquid, such as a burst flexi hose under the kitchen sink. Water damage caused by wear and tear, or a gradual leak that you could have reasonably been aware of generally won’t be covered.18
Of course, exceptions can apply, so it’s a good move to check your building insurance policy document or Product Disclosure Statement (PDS) to find out what kinds of water damage you’re covered for.18
Building insurance vs home insurance: Which costs more?
If you’re considering an insurance policy, you’re probably wondering what home insurance is likely to cost. Canstar data from August 2025 shows that Aussies were paying the following average insurance premiums annually:19
- $2,485 for building insurance
- $520 for contents insurance, and
- $2,795 for a combined building and contents policy.19
“So, based on these figures, if you want to insure both your property and its contents, combining policies could be more cost effective than buying them separately,” says Hartley.
“Of course, averages don’t tell the whole story, and your premium could look a lot different depending on how your insurer calculates it.”
Other than policy type, some of the things insurers might look at to determine your premium might include:19
- How much cover you want for your property and/or contents
- How much excess you’re willing to pay
- Whether you want to include optional covers
- Your claims history
- Your property’s location
- Security features of your property
- Characteristics of your building’s structure, such as its age and materials used.19
Is termite damage covered under a standard home or building policy?
Termites cause more damage to Aussie homes than fires, floods and storms combined.20 But what does building insurance cover when it comes to these tiny pests?
“Because the damage termites cause takes place over a long time, this is usually classed as gradual damage that’s preventable with regular maintenance. As a result, it’s generally not covered by standard home insurance policies. For example, Youi’s home policy doesn’t cover damage caused by insects — including termites,” says Hartley.
So, it’s unlikely that termite damage is covered by your building or home insurance.21 However, CHOICE advises that you can reduce your risk of termite infestation by getting regular professional pest inspections, as well as by:22
- Fixing any moisture problems
- Keeping shrubs and garden beds away from your building’s edges
- Removing any wood on the ground that’s close to your house
- Keeping areas under your home clear.22
So, now that you know the answer to whether building insurance is the same as home insurance, you hopefully feel equipped to choose an insurance policy that’s a good fit for your home and needs.
Looking to buy, renew or just want to learn more about Youi’s home insurance options? Start a quote today to find out if Youi could be right for you.
Home Insurance issued by Youi Pty Ltd. Consider the Home PDS and TMD to decide if this product is right for you.
1 Source: Moneysmart – How insurance works, n.d.
2 Source: Canstar – What does building insurance cover?, March 2024
3 Source: Moneysmart – Contents insurance, n.d.
4 Source: Financial Rights Legal Centre – Home or Contents Insurance Claims, December 2024
5 Source: Moneysmart – Choosing home insurance, n.d.
6 Exclusions and limits may apply. Where you have increased your cover or reduced your excess within 72 hours of a flood, storm, hail or bushfire occurring, cover will be limited to the amount that was effective prior to the change. Loss, damage or legal liability caused by, resulting or arising from flood, storm, hail or bushfire during the first 72 hours of your policy first being purchased is excluded unless certain conditions apply. For full details see PDS, TMD and your policy schedule.
7 Source: CHOICE – How to find the right home and contents insurance policy, December 2025
8 Optional cover. Additional costs, limits, conditions and exclusions apply. See the PDS for full details.
9 Source: Canstar – Do I need home insurance before settlement?, June 2025
10 Source: Canstar – What does landlord insurance cost in Australia?, July 2023
11 Only available where the occupancy cover type noted on your policy schedule is landlord. Conditions, limits and exclusions apply. For full details, see the Home PDS.
12 Landlord's Furnishings cover is automatically included if you have Youi buildings cover and the occupancy cover type noted on your policy schedule is Landlord. Under this cover, damage as a result of an insured event to your furniture and furnishings; white goods; or carpets, loose floor coverings, curtains and internal blinds is covered. Conditions, limits and exclusions apply. For more details, see the PDS.
13 Source: Stratacare – Body Corporate Insurance: Factsheet, April 2024
14 Source: Canstar – What is landlord insurance and what does it cover?, January 2024
15 Source: CHOICE – Renters, here’s why you shouldn’t drop your contents insurance, July 2024
16 Source: realestate.com.au – Strata tile, stratum or company title: What’s the difference?, August 2022
17 Source: Strata Community Association – Everything You Need to Know About Strata Insurance – A Complete Guide, May 2024
18 Source: Canstar – How to make a home insurance claim for water damage, March 2025
19 Source: Canstar – Home Insurance Cost: How much is home and contents insurance?, January 2026
20 Source: Building and Plumbing Commission – Termites, n.d.
21 Source: CHOICE – Does home insurance cover animal damage?, April 2026
22 Source: CHOICE – How to recognise and manage termites, September 2020
