Does your home and contents insurance policy cover accidental damage?

A home and contents insurance policy may cover some types of accidental damage only when verified by an adjuster. Consider checking with your insurer for details.

It goes without saying that the items in your home are precious to you, so it’s understandable that you would want them protected, even from accidental damage. That’s why it’s a good idea to consider ensuring your home and contents insurance policy covers any unintentional harm to your household items.

Such accidental damage may be caused by a range of incidents, including vandalism, rainwater, lightning, earthquakes, storms, fires, and theft. Keep in mind, however, that when you file an accidental damage claim, your insurance provider will send an adjuster to confirm that the damage wasn’t simply a result of regular wear and tear, which could indicate poor maintenance or negligence on your part. 

For instance, if the damage is caused by leakage or seepage that seems to have built up over time, you may not be able to claim a settlement for accidental damage.

Even if the accidental damage appears to be similar in nature, coverage can vary based on the incident causing it. Damage from a stormwater pipe bursting may be covered as accidental damage in your home and contents insurance policy, while damage from a flood may not be covered. Similarly, if an electronic item is damaged, you may only receive compensation for incidents that affect its performance.

Consider comparing home and contents insurance policy quotes online to get a sense of the coverage offered for accidental damage as well as the limits of such coverage. Some insurers may only cover accidental damage as an add-on, which means you'll need to pay a higher premium for it. Reading an insurer’s Product Disclosure Statement (PDS) can help you understand their coverage for incidents causing accidental damage and tell you if you need to buy additional coverage for specific incidents or some of your high-value items.

Should I buy additional accidental damage cover if I have a home insurance policy?

It may be more beneficial to buy a home and contents insurance policy rather than just a home insurance policy, as this could provide cover for your belongings in addition to your house, including coverage for incidents likely to cause accidental damage. Consider checking what type of incidents the policy covers, as well as any limits, to ensure that the most damaging events are adequately covered.

For example, you may need to buy additional coverage for high-end mobile phones, or you may need fusion damage cover to replace motor wiring. While you might not be able to replace your possessions entirely, you may at least get compensation for their value. 

If your insurer only offers accidental damage cover as an add-on, you may be able to choose coverage for specific items that are most precious to you and are likely to get damaged easily. For instance, you may have an easily breakable heirloom or collectible which you’d like to get insured. You should also consider buying accidental damage coverage if you live in a neighbourhood prone to theft, vandalism, or civil commotions. You can get an idea of the cost of adding on accidental damage coverage by comparing home and content insurance policy quotes online.

Is buying accidental damage coverage with home insurance really worth it?

Even if you own only a few high-value items, you can’t say for sure that they won’t ever be damaged. Undertaking repairs for damaged items can prove quite expensive and may not restore the object’s value, meaning that you end up bearing the cost and the stress. Ensuring your home and contents insurance policy covers accidental damage could help you both with covering the expense as well as reducing the stress. You can choose the accidental damage coverage limits based on how much you are willing to pay for the coverage. 

There are a few simple steps you can take to ensure you get the most out of your home and contents insurance policy’s accidental damage coverage. Consider listing the high-value items in your home, including the cost of replacing them, and then compare this list with what different insurance providers are offering.

You can easily compare home and contents insurance policy quotes online, but also consider reading the insurance providers’ Product Disclosure Statement (PDS) to get the full details of the policy. Once you find a policy that offers the most types of coverage, you can negotiate with that insurer to include any missing items or to increase coverage limits.

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Learn more about home insurance

Is hail damage covered by home insurance?

If storms are among the incidents covered by your home insurance policy, hail damage protection is more than likely assured. While all policies differ based on your needs and what a home insurance provider will offer, some things are close to a certainty. 

Extreme weather events tend to be unpredictable in their severity, but dangerous all the same. You'll never be able to fully prepare for any damage caused, be it lightning, strong winds, rain leading to flooding, or hailstorms, but home insurance can at least provide you with a way to deal with life's unpredictable nature. 

If your home suffers from hail damage, you can file a claim with your insurer. In the event that this happens, remember to take pictures of any hail damage as an insurance adjuster will need to evaluate the impact on your home. Any additional wind damage to your roof will also need to be documented similarly.

You may want to check if your home insurance also covers hail damage to the cars parked on your property, and then file the claim for the total damage caused by the hailstorm. Once your claim is approved, your insurer should offer you either a cash settlement or refer you to a network vendor for the necessary repairs.

How do you compare home insurance rates?

When you compare the home insurance quotes offered by various Australian insurers, consider looking at the type of coverage they offer as well as coverage limits and exclusions. You can choose an insurance policy which covers either the total replacement cost, which is the actual cost of rebuilding your home from scratch, or a fixed insured sum, which is an estimate of the cost to rebuild. The home insurance policy is likely to cost you more if you go for the total replacement cost coverage.

Your insurance policy’s exclusions and coverage limits usually depend on how exposed your home is to adverse events like floods and bushfires. It also tells you the maximum compensation that your insurer is likely to pay for damage caused to your home. If you live in an area with a greater incidence of crime or disasters, your insurance policy will likely cost you more.

The amount you actually pay for home insurance can be adjusted by agreeing to a higher excess, which is what you will pay over and above the insured amount from your own pocket. You should consider using the online calculators provided by various insurers to check how different coverage limits affect your insurance premium.

What is a home insurance premium?

Your home insurance premium is what you pay your insurance provider for covering your home under their home insurance policy. It is calculated based on the type of coverage you choose for your home as well as any additional coverage you buy for either your possessions or specific incidents. Your premium can either be paid annually or in smaller instalments. 

Your home insurance policy may cover the total replacement cost, which is the actual expense of rebuilding your home from scratch. Alternatively, it can cover an insured sum, which is a predetermined estimate of what it might cost to rebuild your home. You’re more likely to pay a higher premium for total replacement cover than for insured sum coverage.

Apart from selecting your coverage, you’ll have to figure out your excess, which is the amount you pay out of your own pocket for each insurance claim. If you are okay with paying a higher excess, your insurance premium may be lower. Conversely, if you choose a lower excess, you may pay a higher premium. 

Your insurance premium can also be higher if you live in an area prone to incidents like floods, bushfires, or theft, as insurers are more likely to receive a higher number of claims in such neighbourhoods. 

If you also want to buy insurance for your belongings, a combined home and contents insurance policy may have a lower premium than paying premiums on separate policies for your home and your belongings. 

Are bikes covered under home insurance?

Ordinarily, home insurance only covers damage to your house, which can include additional buildings such as garages, sheds, and fences, as well as permanent fixtures. 

However, to protect the items located in your home or in any of these other buildings, you will likely need to purchase home and contents insurance. Even so, your bike would only be covered if it does not require separate vehicle registration, as is the case for bicycles and 50cc minibikes, but not motorcycles, and only when located on your property, parked or otherwise. 

Depending on the cost of your bicycle or minibike, you can have it listed in your home and contents insurance as a high-value item. You'll want to check your insurer’s Product Disclosure Statement (PDS) to know the normal coverage limit for a bike included as part of your home and contents insurance, as well as the incidents which are covered. 

Insuring your bicycle can be distinct to insuring any personal effects on your bike at the time, or even using the bike when you're out and about. If you want to cover those, such as something in a basket or a camera equipped to the bicycle, or the bike itself as you travel, you will likely need to purchase additional personal effects insurance. You can also read about any additional coverage available under the personal effects policy, though for full coverage, an ideal option will likely be a separate bike insurance policy.

What does home insurance cover?

What home insurance specifically covers and the extent of the coverage depends on the insurance provider and the individual policy. However, home insurance typically covers the property and other permanent structures found on or in the property, such as fences, in-ground swimming pools, garages, and dishwashers, to name a few.

There are usually two types of homeowner's insurance you can choose from, with "total replacement cover" or "sum-insured cover". 

If you’re not sure which option to take, it may be worthwhile to speak to a professional valuer to understand how much it might cost to rebuild your home and replace what's inside.

How much is home insurance?

How much your home insurance could cost and the amount of premiums you pay will depend on many factors, including the amount you need to cover, the excess you're willing to pay, and what type of cover you want to take. 

It's important not to base your insurance policy decision solely on the premiums being charged, reviewing what the policy covers, its features, claim exclusions, and caps when deciding which home insurance policy is the right one for you.

Do I need home insurance for a home loan?

While home insurance isn’t necessarily a requirement for a home purchase per se, it’s likely that if you’re purchasing a home with the help of a home loan, you’ll need to take out home insurance on the property. Home insurance can be one of the factors required in the pre-settlement documentation for a home purchase, and you may be advised by either the bank or a broker (or both) ahead of settlement.  

What is home insurance?

For homeowners, home insurance can provide some financial protection to your property when things don’t go as planned. If you have home insurance and your property is damaged (or even the permanent fixtures inside), you could make a claim to your insurer to cover the costs of getting it fixed, replaced or rebuilt.

The idea behind property insurance is that you pay insurance providers to take on the risk of loss or damage to your property that you would otherwise be carrying. 

Do I need home insurance?

While homeowners' insurance is not legally required, it’s an option for those who want financial protection for their property. Some mortgage lenders may even require borrowers to take out home insurance.