My main concern is also fire. We have renters' insurance, which covers our belongings and also includes some liability insurance, and I think it's about $160 (US) a year (I don't know if "contents insurance" is a thing in the US). I would probably be willing to pay twice that much. Sure, I *could* afford to replace everything in my home if the house burned down. But oh, wow, would that ever suck!
The most expensive thing I have bought is a new $1,600 fridge (before I found this website and realised I could have bought a nice one year old fridge on Gumtree for $500).
When you want/need to replace everything at once, though, it's a lot more expensive than gradually accumulating stuff over the years. Like, we waited until our sofa went on sale and we had a coupon, and we timed the purchase to go with the opening of a new credit card that had a cashback bonus if you spent a certain amount in the first three months. Several other pieces of furniture were free or low-cost from friends or yard sales or whatever. Likewise clothes - building a whole new wardrobe from scratch over a period of a month or two would be interesting, but also a huge pain in the ass and probably expensive.
If everything in your home were damaged in a fire (or earthquake, or whatever extreme thing happens where you are), what would it cost you to get back on your feet again - to have enough clothes to get you through the week, something to sleep on, etc.?
I don't know how it works in Australia compared to the US but detailed descriptions (with brands, etc.) go a long way with a US insurance company, even if you don't have the actual receipt.