What does home insurance cover?

What does home insurance cover?

No one wants to be in a situation where they’re forced to file an insurance claim. But when life takes an unexpected turn, you may start wondering whether your insurance coverage can help. For instance, if there’s a hail storm and your roof is damaged, you may want your insurer to pay for the repairs, so you need to make sure your home insurance policy covers hail damage. You should remember that home insurance only covers the physical building that forms your home, and any sheds, garages, fences, or swimming pools on your property. You’ll need a separate contents insurance policy to cover the possessions inside your home.

While it’s possible to bundle your home and contents insurance together, many Aussies don’t realise that the two are separate policies. You should make sure you check the coverage and limits of each policy so that you know the level of financial protection you have. Particularly if you have contents that are of high value like jewellery because the insurer may not value it to the same amount as it’s valued. You can get individual policies for these high-value items to avoid them being underinsured on your overall policy. You can find out more about coverage limits, inclusions, and exclusions in the insurer’s Product Disclosure Statement (PDS).

List of things covered under the home insurance policy

If you own a home in Australia, buying home insurance is recommended. If you’ve taken out a home loan, the lender will likely require you to purchase home insurance before you move in. Depending on the insurer, having home insurance can also mean you have access to temporary accommodation while repairing or renovating your property after making a claim. Usually, home insurance will cover any damage caused by unpredictable incidents, whether natural or human. Most policies include the following kinds of coverage:

  • Fire damage insurance, which compensates you for damage caused by fire including bushfires and sometimes even the smoke and ash.
  • Theft and attempted theft covers any damage to your property caused by robbers breaking into your home.
  • Water damage covers damage caused by the bursting of storm pipes, or stormwater entering your home.
  • You should remember that seepage and leakage are not covered, while flood damage may only be offered as optional coverage.
  • Malicious damage, including vandalism and rioting, covers damage resulting from a commotion in your neighbourhood or attacks by vandals.
  • Hail storm damage covers damage to the roof or walls of your home caused by hail.
  • Lightning damage covers power surges and other damage resulting from a lightning strike. You may need additional fusion damage cover if any motor wirings are burnt, and not all types of electrical damage may be covered.
  • Accidental damage covers unintentional breakage of glass, ceramics, or sanitary fittings. Some insurers may ask you to buy additional coverage based on the items you have in the house.
  • Earthquake damage covers damage caused by tremors and earthquakes.
  • Tree damage covers the cost of repairs needed if a tree or its branches fall on your home.

What does home and contents insurance cover?

Home and contents insurance covers the personal possessions located inside your home in addition to the house and other fixtures. Your policy may cover items such as furniture, white goods, appliances, electronics and jewellery. Home and contents insurance policies may not, however, cover damage to or loss of belongings when taken out of the home or belongings of people visiting your home. Also, the coverage limit for various items can vary from policy to policy. A basic home and contents insurance policy may be more affordable, but the coverage is limited, so it’s best to read your insurer’s PDS.

As with home insurance, you can buy optional accidental damage cover and widen the financial safety net for your home’s contents. However, remember that wear and tear to any items aren’t part of most policies coverage. If any insured belongings are lost or damaged, you can file a claim with your insurer to cover the costs of getting the items fixed or replaced. If your claim is approved, the insurance company may either:

  • directly pay a contractor to repair or replace the covered contents; or
  • reimburse you the repair or replacement costs.

If you frequently carry personal belongings outside the home, consider buying the optional cover often referred to personal effects insurance. Some of the items that may be covered by a personal effects policy include your handbag, jewellery, camera and smartphone.

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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.

Does home insurance cover tree root damage?

While trees can add much beauty to your property, they can be an indirect cause of damage to your home. For instance, a storm could knock branches off trees on to your roof or windows. A really strong storm may even cause the tree to topple entirely. 

Home insurance may not directly cover tree damage to your house. However, the policy will likely cover the incident, such as a storm, which resulted in branches or uprooted trees falling on your home. You can check your home insurance policy’s coverage for various incidents by reading the insurer’s Product Disclosure Statement (PDS).

You should remember that trees can require regular maintenance, just like the plumbing in our homes. Insurers may check whether the tree, its roots or its branches were rotting due to a lack of care, in which case the damage caused by the tree falling on your home may not be considered accidental damage. Again, if a branch falls on your house while you’re trimming it, you may not be able to claim compensation from your insurer for the damage. If any trees are growing too close to the walls of your home, consider checking that none of the branches or roots is causing any stress to your home, which can result in structural damage.

Does home insurance cover accidental damage?

Home insurance offers cover for any damage to your house and most policies cover the main building, garage, permanent attachments, and other external buildings that can be locked. 

Every insurance policy lists the defined events that will be covered, such as fires, floods, lightning strikes, theft, or falling trees. A few may also offer the option of accidental damage home insurance cover for other possible mishaps and unintentional damage around the home, such as when the dog knocks over the TV, or when red wine is spilled on the carpet.

The home insurance accidental damage cover is available only for the address provided at the time of buying the policy. 

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.

Does homeowner’s insurance cover electrical problems?

Every home has a range of electrical fittings,appliances and wiring running through the structure of the house. You can face many kinds of electrical problems but, unfortunately, your home insurance policy may not cover all of them. Damage accidentally caused by natural accidents may be covered, as might the repair of motors if you have opted for fusion damage cover. For example, if there’s a lightning storm and your home suffers a power surge which causes a short circuit, any repairs needed may be covered if your homeowner’s insurance contains lightning damage.

However, if any electrical appliances stop working, even a home and contents insurance policy may not cover the cost of repairing the appliance. Also, you should check with your insurer about making any electrical repairs inside your home as that may affect your coverage. 

Usually, in Australia, you need to hire a professional electrician to carry out any inspections or repairs to the electrical system in your home. This can include conducting periodic checks to make sure the electrical wirings are not exposed to seepage, flooding, or attacks by rodents. Consider asking your insurance provider about optional coverage for fixed electrical appliances such as air-conditioners and washing machines.  

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.

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. 

Does home insurance cover termite damage?

It is unlikely that the average home insurance policy will cover damage caused by termites, mice, or other vermin, which are typically the result of negligence. For instance, water may have seeped from a heater or washing machine and dampened the woodwork in your home, attracting termites. Since termites usually build colonies, you’ll need to deal with the existing infestation and also take preventative steps to prevent future termite damage.

Treating your home for termite damage can be quite expensive, and you’ll likely have to make significant repairs depending on the size of the infestation. You may want to check if your neighbours have also had termite damage issues, and consider taking more long-term measures to keep termites away.  For example, you could install a chemically-treated soil barrier or baiting station, both of which may be effective for a few years. 

Consider inspecting your home  for any leakage or seepage from time to time, especially in the flooring or the outer edges of your home, as a precaution against damage by vermin. You may also want to consider hiring a pest control professional who can inspect and treat your home to protect against termites.

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.  

Can an insurer deny a lightning damage insurance claim?

Most Aussie insurance providers include lightning strikes among the incidents covered in their home and contents insurance policies. However, they’ll probably confirm whether you could have prevented the damage caused by the lightning strike before approving your lightning damage insurance claim.

For instance, lightning strikes may cause damage to appliances in your home and affect the working of your fridge or other appliances with a motor or compressor. If you have not purchased fusion damage cover, your lightning damage claim could be denied.

Also, if you live in an area where lightning storms are more likely to occur, but you did not take any steps to protect your home and appliances against potential lightning damage, your insurer may not accept your lightning damage insurance claim. This can include installing equipment to guard against electrical surges or maintaining the trees on your property to prevent damage to buildings from trees or branches felled by lightning. You should check with the insurance provider on the measures you can take to prevent lightning damage, before buying the policy.

Do I need legal cover on home insurance?

Besides protecting your home and your possessions from damage and theft, many home insurance policies also cover unfortunate accidents that sometimes result in legal action. This is called home insurance legal cover.

What does it cover?

This type of insurance cover protects you and your family members from liability if someone gets injured on your property. You can also get coverage for scenarios such as you or a family member accidentally injuring someone else outside your home or accidentally damaging someone else’s property. 

Typical liability claims include slips and falls in your home and the ensuing medical expenses, or falling trees or branches that cause  damage to your neighbour’s home or parked car.

Dog bites are another claim often covered. If your dog bites someone and you’re found liable, you’ll be covered for the vet and medical bills. Similarly, if your dog damages someone else’s property, home insurance legal cover will often take care of your liability.

Every member of your family is usually automatically included in home insurance legal cover provided they live with you.

Does homeowners insurance cover blown-down fences?

Most insurers consider fences a permanent fixture on your property. They are ranked alongside your home, garages or sheds, swimming pools, and solar panels when it comes to your home insurance policy. Your policy, therefore, covers your fences for the same incidents that cover your home or other parts of your property. For example, if there’s a major storm in your area and fences get blown down, you can get your insurer to pay for the cost of repairing the fence. You can check your insurer’s Product Disclosure Statement (PDS) to confirm that your policy covers the incident before filing a claim. Also, if the fence that has been damaged or blown down divides your property from your neighbour’s, you both may file a shared fence damage claim with your respective insurers. 

You should remember that there may be situations when your home insurance policy doesn’t cover damage to the fences on your property. Suppose you were working on or near the fence and cause some sort of damage to it you may not be able to claim compensation in this case.  Wear and tear on a wooden fence from water-logging near the fence, can be considered negligence on your part and your insurer may deny your claim.

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.

How to file a Youi home insurance claim

Dealing with a disaster is never a pleasant experience, but it can be worse if your home is extensively damaged. At some point, you’ll have to estimate the damage to your home and file the necessary insurance claim. 

If you’ve bought a Youi home insurance policy, you can contact them regarding an insurance claim either by calling 13 9684 or through the Youi website. If you don’t remember your policy number, you can identify yourself and provide your address when speaking to a Youi member to grant yourself access to your policy details, handy if you’ve had to leave home in a rush and may not have had the time to collect any of your belongings, let alone insurance policy documents. 

You may not need to fill out any claim forms right away, but you’ll need to describe the incident and the damage caused to your home. Once you’ve contacted Youi, an inspector will visit your home and verify the damage before your claim is accepted and processed. Insurers usually expect you to contact them at your earliest possible convenience after a damaging incident, or within 30 days at the latest, as is the case with Youi