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.