Butter Insurance review

Pros

• Butter Insurance offers a subscription-style policy to keep things simple for people looking to insure their contents. You can leave your monthly or annual plan at any time without being hit in the pocket.
• It's possible to add insurance for your new device, such as your laptop or mobile phone, while at the checkout (only with certain partner retailers). Doing this lets you access 7 days of free coverage.
• There's no insurance paperwork – you can manage your cover and make claims online via your Butter account.

Cons

• As a recent entrant into the insurance market, some may prefer the option of a larger name such as NRMA or Bendigo (who both also offer single-item insurance).
• There's a flat excess of $75 for claims for mobile phone screen repair or replacement. But more expensive electronics will carry a higher policy excess. Read more on this below.

_{Review by our insurance writer James Martin}

What does Butter Insurance cover?

Butter Insurance offers single-item insurance, including many of the same items that are covered in a regular contents insurance policy. For example:

You must list each individual item you want covered in your Butter account. At the time of writing, each device or item must have a purchase price between $300 and $5,000. Items must be new and be added to your account within 90 days of you buying them.

Here's a breakdown of what's included

Accidental damage

Butter Insurance includes coverage for unintentional damage to your insured possessions. Broadly, accidental damage means damage "that is not expected or planned by you". After a claimable event, Butter Insurance will either:

• Repair the item
• Replace it
• Pay the sum insured

Theft cover

Your item will also be covered for theft while an item was in your possession, or in a secured place at home or in your car or boat. After a successful claim, as Butter Insurance's product disclosure statement (PDS) states, "we will at our option provide a replacement item or pay the sum insured".

Exclusions

Here are some of the main exclusions from a Butter Insurance policy.

• You won't be covered for the accidental loss of an insured item. For example, if you leave it unattended by mistake.
• Loss or damages due to wear and tear.
• If you didn't take reasonable care to stop theft or accidental damage from happening.
• Damage from electronic viruses or software malfunction.
• Your phone if it doesn't contain the SIM card which you registered with Butter Insurance when you bought the policy.

• Any fraudulent claims.
• Theft if it occurs where there's no evidence of forced entry.
• Theft or damages from acts of war or terrorism.
• The lawful seizure or repossesion of your contents.
• Product repairs that are covered by a manufacturer's warranty.
• Cosmetic damages (that said, a cracked screen on a phone, tablet or laptop is generally covered).
• Damage caused by vermin or insects.

You can see a comprehensive list of exclusions in Butter Insurance's PDS on its website. Also, read more about common policy exclusions here.

What excess will I pay to make a claim?

Butter Insurance charges a flat excess of $75 for claims for mobile phone screen repair or replacement. Otherwise, the policy excess – the amount you pay upfront to make a claim – starts from $100.

The excess you will pay is based on a tiered system which varies depending on an item’s purchase price. For example, a laptop that you buy for less than $2,000 has a $100 excess. A laptop between $2,000 and $3,000 will come with a $125 excess.

The maximum excess set by Butter Insurance is $450 for a mobile phone and $225 for all other items. In practice, these larger excesses are unlikely to apply to most people.

Bottom line about Butter Insurance

Sydney-based Butter Insurance was founded in 2021. The startup is aiming at a younger demographic of consumers who are confused or irritated by the traditional model of contents insurance.

What are the main USPs of Butter Insurance? You can add cover for just one item. And you have the option of building your plan around only those devices you actually need insurance for. Plus, you can cancel at any point if your needs change. Butter lets its customers add insurance at the checkout in some cases – but until that particular feature becomes mainstream, it’s likely that most users will need to tag on their cover within 90 days of purchase.

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Frequently asked questions

• Who underwrites Butter Insurance policies?

  Virginia Surety Company, Inc – a subsidiary of The Warranty Group Australasia – is the issuer of Butter Insurance.

• Who is eligible for a Butter Insurance policy?

  According to Butter Insurance’s PDS, there are 5 main criteria you must meet if you’re looking to take out cover:

  • The insured item can’t be more than 90 days old
  • It must be new and in good working order
  • The item must be in your possession (meaning it can’t be lost)
  • You must permanently live in Australia
  • You must be at least 18 years old

• Is there a cooling-off period in case I change my mind?

  Yes, Butter Insurance offers a 21-day cooling-off period. This means you can change your mind within 3 weeks for a full refund.

• How do I make a claim?

  Simply head to your Butter account online and use the claims tab. You then select the item you’d like to make a claim for and follow the prompts.