12 February 2026 | See disclaimer
Downsizing from your family home into retirement living can be a major lifestyle shift that requires you to get all your ducks in a row. From having to pack and reorganise your house to updating your insurance coverage, it can be a stressful time.
Among all the details you need to manage, understanding the fine print of your new living arrangement is important. And retirement village contracts can be complex. It’s a major risk to think you will be fully covered for home and contents insurance under a retirement village contract. This is why it’s crucial to know exactly what you are—and aren’t—covered for when moving into this next phase of your life.
How does insurance work in a retirement village?
Retirement villages usually offer leasehold or strata contracts as their main form of ownership and occupancy.
A leasehold or licence will allow you to live in a retirement village, however with this option you won’t be able to own the property you live in. Whereas with strata titles, you can own a share of the common property and hold a title to your unit. [1] This means you will have the option to sell your retirement home in the future.
In regards to insurance, if you sign a leasehold contract and damage occurs to your residence, all retirement villages in Australia are legally obligated to insure their buildings and communal areas to their full replacement value. This means your home’s structure will be insured. But, it doesn’t come at a free cost. Leasehold residents are responsible for paying a portion of this insurance under their general service charges on a regular basis for home protection. [2]
But the rules are different for strata contracts. If you own your residence, the retirement home community management isn’t liable for any structural roof or wall damage to your home. [3] So, if you’re considering this option, make sure you look into home insurance for protection.
Do you need Contents Insurance cover in a retirement village?
If you’re planning on moving into a retirement village, you will need insurance cover for your home’s contents. It’s often a misconception that retirement village insurance will also cover your possessions inside. This means anything you take with you is only covered by your own insurance.
That’s why it’s crucial to have contents insurance cover, so your belongings are protected in case loss or damage from an insured event happens. This includes cover for your carpets, curtains or blinds, potted plants, tools and furniture. The lines between what is and isn’t covered can get blurry, so it’s recommended to consult the Product Disclosure Statement (PDS) for more information.
With contents insurance, you’ll also have legal liability cover for if you are found to be legally responsible after an accident to pay compensation for someone’s physical injury or death, or loss or damage to another person’s property.
Need to start packing?
To help with the stress of downsizing, refer to our moving checklist to ensure you're organised for your move into retirement living.
Moving and downsizing
Downsizing to a smaller home often means reducing your household items, but that doesn’t always mean cutting down on your contents insurance. Australian Over 50s Living & Lifestyle states if you’re moving into a smaller house or apartment for retirement, you may be looking to replace your possessions with luxury furniture or newer technology. [4] This means if you add expensive items to your policy, your contents insurance sum insured may increase instead of decrease.
To help determine what your contents sum insured would be, use our contents insurance calculator to ensure you’re covered for all your belongings.
Questions to ask your village operator
Before you make a final decision to move to a retirement village, you may want to consider asking a few questions that could affect your insurance coverage:
- Is the building insurance premium included in my recurrent charges?
- What is the excess on the building policy if damage occurs to my unit?
- Does the village policy cover fixtures like air conditioners or renovated kitchens?
- Am I able to make modifications to my residence for mobility?
- What extent of coverage does the village policy provide?
- If I need to take out my own home insurance, what is the recommended minimum coverage?
How to save on insurance in a retirement village
At Budget Direct, we take into account several factors that can affect your overall premium cost. To try and reduce your overall price you can:
- Reassess if you need your optional covers
- Increase your excess
- Pay annually rather than fortnightly or monthly instalments
Quote First with Budget Direct Contents Insurance
Having Contents Insurance can offer protection for your belongings in case loss or damage occurs. Save 15%^ on your first year’s premium when you purchase a new contents insurance policy online.
Frequently Asked Questions:
Does my policy cover me if I am renting in a retirement village?
If you sign a leasehold contract and take out your own contents cover, your belongings will be protected if an insured event occurs at your home. Retirement villages in Australia are generally obligated to insure the buildings and communal areas to their full replacement value if damage happens. This means you will be covered as it’s the community operator’s responsibility to repair your home’s structure within the retirement village. [2]
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