Filling out a home insurance claims form

Home insurance claims: How do they work?

Unsure about home insurance claims? Learn how the process works and how to prevent claims in the first place.

For many people, their property is their most valuable asset. Therefore, in the event that your home is damaged, or worse, destroyed, due to events outside of your control, it is critical to have a safeguard in place in the form of home insurance. The same goes for contents insurance to replace your possessions in the event of theft, damage or loss.

This guide's purpose is to give you a clearer understanding of how home insurance claims work so that you can ensure your home and possessions have the adequate amount of cover and to help you avoid some common pitfalls that can result in payment shortfalls or long delays in having your claim processed.

What can home insurance cover me for?

Home insurance is protection for your home in the event that it is damaged or destroyed. There are three main policy types available in Australia which are home insurance, contents insurance and combined home and contents insurance. Additionally, home insurance and contents insurance have two different ways in which they will cover your expenses in the event of a claim. 

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Policy type and what it coversPolicy compensation methods
  • Home insurance. Also known as property or building insurance, this covers financial losses associated with damage to your home including the main dwelling, garage, outbuildings and permanent fixtures such as plumbing, wiring, lighting and built-in furniture.
  • Total replacement cover. This covers the total expense of restoring your home to its original state, and may also pay towards the cost of temporary accomodation until your home is habitable again. This policy type reduces your chance of being underinsured but is rarely offered by providers.
  • Sum insured cover. This will cover you for a set amount to pay towards rebuilding costs. While more readily available than total replacement cover, you can risk being underinsured if you fail to properly evaluate the potential costs of rebuilding your home when you set your cover amount.
  • New for old cover. This will replace your lost or damaged possessions with new ones regardless of age.
  • Sum insured cover. Pays a set amount towards the replacement of your lost or damaged possessions. As with home insurance, choosing this compensation method requires proper valuing of your possessions to avoid shortfalls.
  • This is a combined policy, so you can select whatever compensation methods listed above best suit your needs for home and contents.

How does the home insurance claims process work?

Home insurance is basically a promise of financial assistance if your home is damaged or destroyed and lodging a claim is the act of calling on your insurer to honour that promise (providing the terms and conditions of the agreement have been met by you).

  • Step 1. Contact your insurance company via phone or online as soon as reasonably possible after the event occurs.
  • Step 2. Fill out and submit a claim form. Many insurers allow you to do this online but you can also do it over the phone. You should receive a claim number once you submit your form.
  • Step 3. The insurer will send a representative to your property to assess the damage, arrange any emergency repairs if necessary and obtain job quotes from their network of builders and repairers.
  • Step 4. Once your claim has been processed your insurer will notify you of the outcome.
  • Step 5. The insurer approved builder or repairer will contact you directly and work will commence as soon as possible.
  • Step 6. When the job is complete, the insurer will pay the builder or repairer and you will be free to move back into your home.

Why is taking stock of my possessions so important?

Creating an inventory of your home and contents is vital as many insurers require you to submit one if you lodge a claim, which means having an out-dated and incomplete inventory, or none at all, can result in lengthy delays as their ability to properly assess the value of your items is hindered.

The most straightforward method of putting one together is to go through your property room by room and make a record of your possessions and their approximate value. Some additional advice to help you develop your inventory include:

  • Keeping the receipts or other proof-of-purchase documents of items.
  • Taking photographs of items to provide additional evidence of ownership.
  • If you aren’t sure of the value of more expensive items such as jewellery and artworks consider having them professionally appraised.
  • Remember that some items, such as antiques, may increase in value over time, so make sure to have them reappraised every few years.
  • Make an effort to regularly update your inventory as you replace old items or buy new ones. Keep your photo inventory up-to-date as well.
  • A range of computer software and smartphone apps created for the purpose of home contents inventory management are now available, such as iTrackmine, Delicious Library, MyHome Pro, Box It Up and Evernote.

Are there any practical measures I can take to avoid home insurance claims?

While home insurance, like most insurance policies, are there as safeguards against the unplanned and unexpected, there are some simple precautions you can take to avoid some of the most common causes of home insurance claims.

Final things to keep in mind

To give yourself the best possible cover and ensure that your claims are processed quickly and successfully, remember to:

  • Equip your home with safety and security devices approved by your insurer such as alarms, CCTV and Residual Current Devices (RCD).
  • Add cover to your policy for floods, fires or cyclones if you live in an area prone to such events.
  • Avoid making small claims you could easily pay yourself, as these can push your premiums up.
  • Not leave your home unoccupied for more than 60 days, as it may not be covered by your insurance.
  • Always file your claim as soon as possible, as further damage due to delays may not be covered.
  • Always have any temporary or emergency repairs approved by your insurer or they may not be covered.

Looking for home insurance? Compare policies from Australian providers

Details Features
Home and Contents
Home and Contents
Save 35% when you combine new Virgin Home & Contents Insurance Price Saver online. T&Cs apply.
  • Up to $20 million legal liability cover
  • 21 day money back guarantee if a claim has not been paid
  • Optional extras on offer
Go to site More info
Building and Contents Insurance
Building and Contents Insurance
Up to a 19% discount on policy if home is occupied day and night. Terms and conditions apply.
  • Cover for loss or damage by theft, attempted theft
  • Cover for damage from accidental fire
  • Optional burnout of electric motors
  • Optional accidental damage cover
Go to site More info
Gold Home and Contents
Gold Home and Contents
Save 35% on cover when you purchase a Gold Home and Contents policy online.
  • Cover for surrounding garages, verandahs and fences on your property
  • Cover for your contents
  • Cover against theft, storm and rainwater, fire and more
  • Temporary accomodation
Go to site More info
Comprehensive Building and Contents
Comprehensive Building and Contents
Up to 30% discount for combined Home and Contents purchased online. Terms and conditions apply.
  • $8,000 cover for outdoor contents
  • $5,000 cover for home office contents
  • Accidental damage cover
  • Emergency accommodation cover
Go to site More info
Home and Contents - Premier Care
Home and Contents - Premier Care
3 flexible levels of cover to choose with no extra fee to pay by the month.
  • Theft from inside, outside or away from home
  • Electrical motor burnout cover
  • Cover for jewellery and watches up to $2000 per item ($10,000 total)
  • Safety net up to 30% of sum insured for building and 20% for contents
Go to site More info
Image: Shutterstock

William Eve

Will is a personal finance writer for specialising in content on insurance. While he cannot give personal advice to clients, Will enjoys explaining the intricacies of different types of protective cover to help individuals and businesses find affordable cover that won't leave them underinsured.

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