Bushfire insurance

Bushfires in Australia: A guide to bushfire insurance, creating a bushfire survival plan, safety tips and more.

Australia is bracing itself for one of the hottest summers on record and a hot summer means a heightened risk of bushfires. This highlights the importance of having adequate bushfire insurance should the worst happen.

While cover for fire is standard in most home and contents insurance, it's always good to check that your policy covers natural disasters such as bushfires.

This guide looks at the types of bushfire insurance available, how much is enough to cover your home and possessions, and also offers some tips and ways to protect your home and family if a bushfire were to strike.

Bushfire insurance

Having a family and owning a home means maintaining a portfolio of insurances to cover the things we love. Most homeowners have the normal range of insurance such as:

What is covered?

Insurers generally offer three types of home building insurance:

  • Sum insured. Sum insured places a specified limit on how much you will be paid, regardless of how much it costs to rebuild.
  • Total replacement. Total replacement covers the cost of rebuilding at current prices.
  • Extended replacement. Extended replacement adds an additional payment percentage above the sum insured, either inclusive or as an optional extra.

Of these three types, sum insured is the most commonly offered by insurers and total replacement the least offered and hardest to find. But the Australian insurance market is highly competitive and these options are available. Shopping around is the best way to find the cover you need.

Ideally you need insurance that covers at least 90% of your rebuilding costs. You will need to factor in:

  • Inflation. What is adequate cover at the time you take out cover may not be a year or two later.
  • Home improvements. Any renovations or improvements that increase the market value of your home need to be converted.
  • Personal belongings. Any valuable collections or personal items with high replacement value should also be factored in.
  • Natural disasters. Costs of rebuilding can rise in the wake of natural disasters due to increased demand for tradespeople.

Additional benefits

Another raft of expenses that need to be factored in are supplementary costs. These include:

  • Alternative accommodation. The cost of temporary emergency accommodation while your home is being rebuilt.
  • Site clean up. Removal of debris, demolition of buildings etc following a natural disaster such as a bushfire
  • Rebuilding services. The cost of architects, surveyors, plan lodgement fees, legal expenses, compliance with new regulations, and so on.

Supplementary costs such as these can soon add up, so finding cover that includes them is worthwhile. A number of insurers do offer supplementary benefits, either included in the sum insured or in addition to that amount.

Shop around to see how each type compares in your search for insurance that covers all of the costs of rebuilding your home.

Embargo for listed events

An embargo for listed events acts in a similar way to the waiting period for your health insurance, meaning you have to wait a certain amount of time before you’ll be able to make a claim.

These periods vary with insurers, so if you live in a bushfire-prone area, it’s important to have adequate cover in place well before a fire risk emerges. If you take out cover at the last minute, you may not be covered in time and your claim may be denied because of it.

Making a claim after fire damage

If your home and contents are damaged or destroyed by a bushfire, the normal steps involved in making a claim are as follows:

  1. Contact your insurer as soon as possible, even if you are not able to return to your property or don’t have access to your policy details (insurers keep electronic copies on file).
  2. Your insurer will then allocate you a claims number and an assessor will be sent to inspect your property.
  3. If your home is not totally destroyed, make a list of damage and losses and take photographs.
  4. If clean-up or emergency repairs are required for safety reasons, you may undertake them but take before-and-after photographs and notify your insurer before authorising any major repairs.
  5. If you are in urgent need, such as requiring money for alternative accommodation or emergency household items, notify your insurer who should fast-track the money (within five business days).
  6. Your insurer will then assess your claim, which must be done within 10 business days, unless further time or information is requested, and they will notify you of the outcome.
  7. If you are unhappy with the outcome, you can ask the insurer to review the settlement (up to 12 months after settlement).

Common insurance issues when claiming for bushfires

While the majority of claims are paid out for bushfire damage or loss, there are circumstances where claims are rejected by insurers. These can include:

  • If you were still serving your waiting period when the bushfire occurred and your cover had not yet taken effect (usually within 72 hours of taking out your policy).
  • If there is damage from scorching, burn marks or melting where there was no flame or burning building within 10 metres of your home.
  • If there is damage from heat, soot, smoke or ash where your buildings or contents did not catch on fire.
  • If you did not take reasonable precautions to prevent your loss, such as cleaning gutters or debris from your yard to reduce fuel build up near your home..

What if my claim is rejected?

Should you be unfortunate enough to have your claim rejected, there are steps you can take to pursue the matter further.

  • You can ask the insurer for a review within 12 months of your assessment
  • You can lodge a complaint with the Financial Ombudsman Service of Australia
    Website: www.fos.org.au
    Telephone: 1800 367 287
  • For free legal advice, you can contact the Legal Aid office in your state or the Insurance Law Service:
    Website: www.insurancelaw.org.au
    Telephone: 1300 663 464.

What is a bushfire?

For insurance purposes, the definition of a bushfire is an uncontrolled, non-structural fire burning in a grass, scrub, bush or forested area. Its severity is determined by factors such as fuel load, wind strength, temperature and humidity and it can be classified as "catastrophic" when these factors are at their most extreme.

How do bushfires start?

A bushfire can start in a number of ways including:

  • Lightning strike. Dry lightning (where no rain is present) is a major cause of bushfires in Australia.
  • Accidental human intervention. Sparks from agricultural machinery, discarded cigarette butts, unattended camp fires and poorly controlled burn-off programs can all cause bushfires.
  • Deliberate human intervention. Arsonists are responsible for a number of bushfires every year, wantonly putting property, livestock and human lives at risk.

Once a bushfire has started, there are several factors that determine its growth and the speed at which it spreads:

  • Fuel load. The greater the fuel load, the hotter and more intense the fire will be. Dense undergrowth that has not been regularly burnt off and the oil from eucalypt trees can both promote the growth of a bushfire.
  • Fuel moisture. Dry fuel will burn rapidly, so the amount of time since rain fell can be a determining factor in bushfire growth.
  • Wind speed. Strong wind provides a constant supply of oxygen to a bushfire and can promote its rapid spread by “spotting”, blowing burning embers ahead of the fire front to start new fires.
  • Ambient temperature. The higher the temperature, the more likely a bushfire will continue burning, as the fuel is much closer to ignition point.
  • Relative humidity. The drier the air, the more flammable the vegetation and the greater the intensity of the bushfire.
  • Terrain. Fires accelerate when travelling uphill and decelerate downhill, so the steepness of the terrain plays an important part in the speed of bushfire spread.

Bushfires in Australia and hazard reduction

Prevention is always better than cure, so reducing the risk to your home from bushfire through hazard reduction is as important as having adequate insurance in place. Preparations over the long term can include:

  • Controlled burning. This is carried out by volunteers and property owners on days when winds are light and undergrowth is still relatively damp. Permits must be obtained and great care taken, as controlled burning can easily get out of control and cause the very disaster they are trying to prevent.
  • Property maintenance. This involves regular tasks such as keeping undergrowth down through slashing and mowing, removing overhanging trees and vegetation from buildings and storing fuel and combustibles well away from the home in sheds or outbuildings.
  • Home maintenance. Many homes are lost in bushfires as a result of embers landing on roofs and gutters. You can make your home more fireproof by keeping gutters free of leaves and sealing any gaps in your home’s exterior where sparks and embers could lodge.
  • Equipment maintenance. If your property is semi-rural, you should have suitable fire-fighting equipment such as a pump and long hoses. These should be kept in good working order and water sources such as dams and swimming pools kept filled and ready for use.

What to do before a bushfire

While long-term hazard reduction can help to reduce the impact of a bushfire, short-term preparations in the face of an approaching fire can often make the difference between saving or losing your home (and possibly your life).

If there is a bushfire heading for your property, you should immediately activate your Bushfire Survival Plan. This is a plan that you and your family have already worked out to deal with every aspect of a bushfire, both before, during and after.

Pre-bushfire actions might include:

  • Securing pets and livestock in a relatively safe place with plenty of shelter and water
  • Turning off all unused appliances in the interim and turning gas and power off altogether in a fire to prevent explosions and electrocution
  • Hosing down roofs and gutters to discourage burning embers
  • Parking vehicles undercover in garages and sheds
  • Closing all doors and windows
  • Keeping the radio on to stay abreast of developments

Bushfire survival plan

A bushfire survival plan is a set of instructions you and your family have created to deal with every aspect of a bushfire. It should be a plan that the entire family has contributed to and in which everyone knows their individual roles and responsibilities.

The first part of your plan should be a decision on whether you are going to leave early or stay and defend your home and the information your plan contains will depend on this decision.

If you plan to leave early before the fire, your plan should include:

  • When you will leave?
  • What you will take with you?
  • Who will be responsible for bringing it?
  • Where you will go?
  • Who you will inform about your movements?
  • What preparations you will make to protect your home before you leave?

If you plan to stay and defend your home, your plan should include:

  • Immediate preparations before the fire
  • Know where you will shelter in your home
  • List what your emergency kit will contain
  • Care and supervision of children and pets
  • The procedures you will follow once the fire front has passed

In both cases, you should have a backup plan in case something goes wrong (i.e. an alternative vehicle if your car won’t start or an alternative water source if you lose water pressure).

What to do after a bushfire       

It’s important to remember that the previous steps should only be taken if you have the time and are intending to stay and defend your home. If you are not planning to stay, then you must leave as early as possible, as many fatalities result from people making last-minute decisions and being overwhelmed by fire while fleeing in their vehicles.

If you remain with your home and the bushfire front has passed, the first thing to do is to go outside and check for spot fires and extinguish them immediately. Many homes survive the fire front, only to be lost hours later due to uncontrolled spot fires, so be sure to remain vigilant.

If you are returning to your home after being evacuated, be on the lookout for fallen power lines, leaking gas or sewerage, downed trees and dangerous debris left in the wake of the fire. Also be cautious when entering your home and if there are signs of major structural damage, refrain from entering and call relevant authorities and your insurance company.

Bushfire safety tips

The following additional bushfire safety tips are also worth bearing in mind:

  • Never stand on your roof to water it down, as more injuries are incurred from falling off roofs than from burns.
  • Ensure that LPG cylinders around your home are installed with the pressure relief valves facing outwards, so that if they catch fire the flame isn’t directed towards the house.
  • If your house catches fire and you are forced to leave, move everyone to an area that has already been burnt.
  • Wear protective clothing and smoke protection when outside and drink plenty of water to prevent dehydration.
  • Block downpipes with a sock full of sand and fill gutters with water.
  • Block gaps under doors with wet towels or blankets.
  • Fill the bath and collect water in buckets to put out spot fires.
  • Obey any directive to evacuate, as human life is more important than property.

Where do bushfires occur?

While most of Australia is hot and dry, different regions become more bushfire prone at different times of the year.

  • Northern Australia. The fire season occurs in winter and spring, when the grasses are dead, fuel has dried out and intense high-pressure systems over South Australia produce strong south-east to north-east winds.
  • Australia’s East Coast. The fire season here is spring to mid-summer after the dry winter/spring period and before the summer rains. This is when deep low-pressure systems near Tasmania can create strong, hot and dry, north-westerly winds.
  • South-Western Australia. Heat troughs from the Pilbara and hot air from the interior increase the fire danger here in late spring, summer and early autumn, when fuel has dried out after the winter rains.
  • South-Eastern Australia. Summer and autumn are the most dangerous times, when the vegetation is dry and hot north-westerly winds occur.

Bushfire information

Every state and territory has its own bushfire information services:

RFSNew South Wales: www.rfs.nsw.gov.au
ESAAustralian Capitol Territory: www.esa.act.gov.au
CFA Victoria: www.cfa.vic.gov.au
qfesQueensland: www.qfes.qld.gov.au
CFSSouth Australia: www.cfs.sa.gov.au
tasTasmania: www.fire.tas.gov.au
DFESWestern Australia: www.dfes.wa.gov.au
PFESNorthern Territory: www.pfes.nt.gov.au

Stay safe and protect your home from bushfires with the right cover

Hopefully this guide has provided a timely reminder of the need to be prepared, not just in an emergency, but all year round and to have adequate home insurance cover in case the worst should ever happen.
Picture: bertknot, licensed under Creative Commons Attribution-NonCommercial-ShareAlike 2.0 Generic (image cropped)
Picture: Shutterstock

Richard Laycock

Richard is the senior insurance writer at finder.com.au and is on a mission to make insurance easier to understand.

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