As we have all heard, your most valuable asset that you will ever own is likely to be your home and therefore it is important that you are educated when choosing insurance to protect your home should disaster struck.

The important aspect of choosing home insurance is making sure you have adequate cover that will cover all your losses in an insurance event. Not only should it cover the building itself, it should also cover any other structures and possessions you have in the home.

Comparing insurance policies from all the insurance providers is where the difficulty comes in. The products offered by different insurers are rarely the same and understanding the differences and choosing the correct policy is important. Mistakes could cost you thousands or possibly hundreds of thousands of dollars.

The first thing to understand about home insurance is that there are two types, total replacement cover and sum insured cover. Total replacement cover covers the cost of completely repairing or replacing the house. This type of insurance is generally more expensive.

A sum insured policy is the most popular type of policy and the cost is based on the amount that you are insuring the house for. This type of insurance requires you to understand value of your home and contents so that you purchase an insurance policy that will cover your losses. Underinsuring is a huge problem often leaving home owners with a gap they need to fill.

When purchasing insurance you can choose to insure for home (the physical building) and / or contents. Contects covers any items you for any loss of items that you have in the house. Contents insurance generally covers for any items that are damaged or stolen within the house. Some higher value items such as jewellery and paintings will require you to specify them individually on the policy and will increase your premium based on value.

The most important thing to understand your insurance policy is to read the Product Disclosure Statment (PDS) which contains all the information you need to understand your policy in a simple to understand format.

For great deals on Home Insurance and Car insurance, check out Woolworths Insurance and use a Woolworths Car Insurance promo code for your purchase.