Five common misunderstandings about home and contents insurance

Five common misunderstandings about home and contents insurance

Your valuables may be irreplaceable, but you can at least recover their financial value if your home and contents insurance includes adequate coverage.

For any Australian homeowner, what’s inside the home is often as valuable as the home itself. The contents of your home have sentimental value as well, whether it’s family heirlooms preserved across generations or your own set of collectibles and memorabilia. Losing such objects or seeing them damaged can be heartbreaking, especially as they may not be easy to replace. 

If you know or can estimate the cost of your valuables, a home and contents insurance policy can at least compensate you financially, though not emotionally. You’ll need to make a list of the possessions that the home and contents insurance policy should cover, and up to what limit.

Once you get an estimate of the cost of rebuilding your house entirely and replacing all your belongings, you’ll know how much insurance you need.  If you need help understanding what is and isn’t included, consider reading the insurer’s Product Disclosure Statement (PDS). 

Here are five of the commonly misunderstood aspects of home and contents insurance:


You don’t always live inside your house, and neither do your belongings

You need to remember that a home and contents insurance policy only covers the objects physically located on your property or inside your house. You may not be able to file an insurance claim, for example, if you lose your jewellery or other valuable possessions while on a trip or otherwise outside your home. 

To ensure coverage during such instances, consider purchasing an additional personal effects policy. A home and contents insurance policy may not cost as much as buying insurance separately for your home and your belongings separately. However, you’ll need to ensure that the policy actually covers all your belongings. 


Your insurer may not think your belongings are as valuable as you do

Even if you buy a home and contents insurance policy based on a thorough estimate of the cost of replacing your belongings, you may still end up effectively underinsured if your home’s contents include valuable items that exceed your insurer’s maximum coverage limits. For example, your insurer may cover up to $1000 per item for electrical appliances, but if your $2000 television is stolen, you’d have to pay the difference yourself. 

Also, even if your insurance covers the present value of your home’s contents, this may not be enough to replace everything if prices rise in the future. You could choose a higher ‘sum insured’ limit to get extra coverage, or choose an insurer that offers ‘new for old’ replacements, though this could make your insurance more expensive.


Your valuables may be affected by incidents not covered by your insurance policy

When insurers talk about loss or damage, they’re usually referring to theft and accidents If you misplace an item, or lend it to someone who loses it, it is unlikely you’ll be covered by your insurance. 

Your belongings may also be damaged from incidents that your insurance policy may not cover items like a water leak due to poor maintenance of your home’s plumbing. You should ideally discuss such exclusions with your insurer before buying your insurance policy.


You won’t have a fixed number of valuables and will likely acquire new items

As you acquire new experiences in life, you may also collect new memorabilia of these experiences. After owning your home for a few years, you will likely buy a few more valuables, which need to be insured. 

It may be helpful to keep an up to date list of your home’s contents that you can reassess when updating your insurance. This will help you gauge if you need to upgrade your home and contents insurance policy or purchase additional coverage for some of the high-value items.


The average cost of a home and contents insurance policy can differ from city to city

You’ve successfully listed and evaluated all the contents of your home, you’ve checked the coverage options, and you feel ready to buy your home and contents insurance policy. But when you compare the rates quoted by different insurers, you may find surprising differences when you enter your postcode. 

Insurance costs can vary depending on your location. For example, if you live in an area with a higher crime rate, or at a higher risk of natural disasters, insurers may charge higher insurance premiums or require you to buy additional coverage for specific events.

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Learn more about home insurance

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.

Does home insurance cover tenant damage?

If you have a property that you rent out to tenants, you may ask, does home insurance cover tenant damage? Generally, as a landlord, you’ll require a different type of insurance policy than a regular home and contents insurance that offers coverage for the unique situations faced by landlords.

Landlord insurance

As a landlord, you must insure against additional risks to protect your investment. A landlord home and contents insurance policy covers loss due to natural disasters, storm, and fire. Generally, it also covers fixtures like stovetops, light fittings, window coverings, carpets, and ovens.

Additionally, you may protect yourself against any loss arising due to damage to your property caused by your tenants or their guests. Some landlord insurance policies may also protect you against financial loss due to unpaid rent.

Does homeowners insurance cover tenant damage? In most cases, regular homeowners’ insurance policy will not cover such damage. It’s always best to refer to the product disclosure statement (PDS) to clearly understand what is included and excluded from your home insurance policy.

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.

Can you transfer home insurance?

When you sell your home, you cannot transfer the home insurance policy to the new owner. The buyers need to purchase a new home insurance policy where the insurer will calculate the premium based on several factors.

The risk of any damage to the home is transferred to the new owners when you sell the property. You can speak to an experienced conveyancer or solicitor to find out more about when the risk gets passed to the buyers in your state or territory.

If you move to a new home

Can you transfer home insurance to a new property if you move to a new home?

Some insurers may allow you to transfer your policy to a new property as long as you meet certain conditions. These include informing the insurance company as soon as you enter into a contract to buy the new home. You may need to pay an additional premium when transferring your existing home insurance policy to the new property.

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.

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.  

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.  

Does home insurance cover temporary accommodation?

Seeing your home damaged by a natural disaster such as a bushfire or a hail storm can be traumatic. Unfortunately, sometimes your house may become uninhabitable after such an incident and require major renovation or even rebuilding. In such circumstances, your home insurance policy should cover the cost of temporary or emergency accommodation. 

It's worth checking with your insurer on the coverage limit, as different insurance providers may cover the cost of renting another home for a number of months, though this will vary between coverage cost and insurance provider. However, the maximum coverage will probably run for 12 months. Upon filing a claim, most insurers will likely first ask an inspector to confirm that your home is too damaged to live in, and subsequently cover the cost of temporary accommodation after that. 

You could also need temporary accommodation because the local council or other governing authority may order an evacuation in anticipation of a problem or disaster. In that instance, you should check if your insurance provider will cover the cost of accommodation at such a time and, if so, how you can file a claim in such cases. If you are a pet owner, check if your home insurance policy covers the cost of temporarily housing your pets elsewhere.

Is my home insurance covered for weather damage?

It is important to understand what is covered and what isn't covered in your home insurance policy before purchasing it. One crucial point to consider at the time of evaluating home insurance policies is whether it includes home insurance weather damage cover, and what it actually means if it does.

Typically, the protection afforded by home insurance actually depends on how the home was damaged or affected by conditions. The whole idea behind home insurance is to protect you from loss or damage against an unexpected, sudden event, like a fire or storm. If your home was in the way of a storm and your roof was damaged, which also caused internal water destruction, you may be covered for the damage to the roof and the property. The same holds true for walls or a fence that got damaged in a storm or flood.

However, you may not be covered if the damage occurred because your property was not well maintained and your home suffered a leak. A poorly maintained fence is less likely to be covered by home insurance.

Type of home insurance do I need?

There are two types of house insurance policies, namely total replacement cover and sum insured cover. The former covers the total cost of rebuilding the house to the same standard before it was damaged. The latter home insurance type covers the cost of damages up to a predetermined limit, which is called the sum insured.

Different types of homeowners’ insurance may offer extra cover at an additional premium, including accidental damage, fire insurance, storm insurance, flood insurance, motor burnout insurance, home and contents insurance, and contents insurance. These extras are not classified as homeowners’ insurance types; include one or more based on your situation. 

How to make an ANZ home and contents insurance claim?

Making a home and contents insurance claim for the very first time can surely be a daunting task, especially in the event of a major loss incurred by a catastrophic event such as storms or floods. Moreover, your claims history can impact your premium rate, so it’s important to carry out the process as efficiently as you can. Fortunately, the process of raising an ANZ home and contents insurance claim is fairly simple.  

The very first step you should undertake is contacting your insurance provider online or over the phone as soon as you can. The ANZ home insurance claim contact number is 13 16 14 and is available weekdays from 8 am to 8 pm AEST. Be sure to have your policy number ready when you make the call, though. If you don’t remember your policy number, you’ll need to confirm a few of your personal details, following which the insurer will be able to locate your policy and proceed with lodging the claim. 

Your insurer will then ask you a series of questions regarding the event and the loss you incurred. As a note, it’s a good practice to submit photos of the damages while lodging your ANZ home insurance claim. Contact the police in the event of theft and provide the report number to your insurer when lodging the claim. 


ANZ may send an assessor or representative to inspect the damages onsite, and may even arrange for qualified or experienced replacement specialists to inspect the losses and provide quotes for repairs. As such, it’s ideal to conduct repairs or replacements to your home and contents only after your insurer has agreed to them. 

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

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.