As COVID-19 and the ensuing lockdowns have seemingly affected almost every aspect of our lives, many are concerned about how their home or contents insurance may be impacted.
Homeowners and tenants who are worried about surging premiums in a pandemic environment can rest assured that home and contents policies are largely unaffected by COVID-19. That’s because it’s not likely that COVID-19 would be directly responsible for events covered by a typical policy, such as residential property damage or loss, or damage and theft of possessions, according to an Allianz Australia spokesperson.
IAG has also not made any changes to its home building and contents insurance policies due to the pandemic.
“Pandemics are not a listed event that we provide cover for as outlined in our product disclosure statement (PDS) and a pandemic would not cause loss and/or damage to property which is covered under a home building and contents policy,” an IAG spokesperson said, adding that it was possible for customers experiencing financial hardship to access premium reductions and deferrals.
Lisa Kable, communications manager and spokesperson for Understand Insurance, pointed out that while circumstances have changed, but not all risks have changed due to COVID-19.
“There hasn't actually been a change by insurers because the risk of maybe being burgled has reduced, but the risk of inadvertently leaving a candle burning and having a fire or using heaters or dryers more may increase that risk, so it balances (unexpected risks) out,” she told RateCity.
“There's still risk there, they fall under the same risk bucket that when you took out your policy, but they may have tipped in scale one way or the other.”
Things to note about your home and contents insurance during COVID-19
While most home and contents insurance haven’t directly been affected due to the pandemic, there are still a handful of things homeowners and tenants should be aware of about their policies.
1. Cleaning costs
If a visitor to your home has contracted COVID-19, you may be considering hiring a professional to clean your home. While Allianz Australia has confirmed its home and contents insurance doesn’t cover the cleaning costs for properties if someone has COVID-19 onsite, not all home and contents policies across the board will be the same. It’s best to review your product disclosure statement to understand how you’re covered.
2. Working from home
Work equipment provided by your employer and not personally owned by you may not be covered by your own contents policy. But it’s also possible that employer-provided items may be covered by the organisation, even after it has left the employer’s premises. Organisations may have different types of insurance for items that they own, so you won’t know for sure until you check with your employer and your own insurer to find out the details.
3. New purchases
Many households may have purchased new items to use for remote working or leisure at home, and these may be covered under your contents policy. If you’ve bought high-value items, such as laptops or computer monitors, it’s worth checking your contents insurance policy to see what the value is in terms of unspecified goods. You may also want to consider whether you should specify the goods, or even increase the sum insured.
“By ensuring your policy is up-to-date, you can be confident in the knowledge that if the worst does happen, you have adequate cover to protect what matters,” according to Suncorp Group spokesperson James Spence.
Additionally, if you’ve been out and about with these items, it might be a good idea to think about taking out portable contents insurance to protect valuable items outside the home.
4. Moving away from home
For anyone who has moved from their permanent home to their holiday home or back with their family during the pandemic period, you may need to be aware of the unoccupancy period of your covered home. This is typically 60 days, though some insurers have extended the vacancy period in light of COVID-19. Ms Kable advised anyone who has left home for 60 days or longer to check in with their insurer, particularly given parts of Victoria has begun its six-week lockdown.
5. General review
As we spend more time at home, getting to know your home and contents insurance may be important for anyone concerned about their financial safety nets. Ms Kable suggested anyone who has a building and contents policy to do a pulse check on their policy to see what’s covered and what's not covered. Comb through your PDS to understand your policy’s level of protection.
She also advised Australians to do an inventory of everything they own and think about whether they're insured to the correct amount. This might involve scanning around each room and doing a calculation of how much it would cost you to replace everything. Some belongings which may not seem to be worth much, including costume jewellery, handbags, shoes and linen, may easily add up to thousands of dollars. Consider using a calculator to help with this.
“The last thing we want is for people to be underinsured. It would come as a very rude shock when you have to replace items,” Ms Kable said.