Compare Policies from Australian Brands and Find Cover for Your Home and Possessions
There are three main types of home insurance: Contents Only, Home Only, and Home and Contents. This article will focus on Home and Contents insurance, it's benefits, what you should be looking for in a policy and more. Keep reading to find out more about Home and Contents Insurance or follow the secure links in the table below to receive quotes from Australian insurers.
Home and Contents Insurance Brands
What does home and contents insurance cover?
One of the most important things to check when looking at a policy are the incidents that are covered. While cover benefits will vary between providers, most home and contents cover:
- Legal liability
- Theft or attempted theft
- Malicious damage, vandalism, riot or civil commotion
- Accidental breakage of glass, ceramic and sanitary fixtures
- Escape of liquid
- Storm and rainwater damage
- Debris removal and extra costs of rebuilding
- Temporary accommodation
- Mortgage discharge
- Funeral expenses
- Replacement of locks
- Cover for open-air contents within address
- Contents while moving overseas
- Uninsured guests contents
- Unattached equipment
Do I need home and contents insurance?
If it ever comes to you having to rebuild your home, you will find that there are a lot more expenses involved than paying for labour and materials. Some of the costs you will have to cover include:
- Alternative lodgings for the duration of the work being done on your house
- Removing debris from the site
- The services of an architect or other professional to put together the plans
- The services required to ensure your property is safe for people to access it and conduct work
- Filing plans with the local council
- Services to get your garden up to scratch, including landscaping and gardening.
How do I choose the right policy?
This may seem like common sense but it pays to do your research. Some policies offer cover for nominated events such as theft, or fires and floods, while others provide coverage for any type of accidental event. Some even provide limited cover even if the item is outside of your home, such as a laptop. In terms of types of Home and Contents Insurance policies, there are two main categories, namely:
- Policies that provide coverage for the value of your belongings
- Policies that ensure the replacement of your belongings with new goods, also known as 'new for old' policies
'New for old' policies are generally more expensive so you need to figure out what type of coverage you want and determine whether or not the price is worth it. One way to save money on Home and Contents Insurance is by opting for a higher excess. In other words, if you could cover the first $1,000 of the loss, the premium you have to pay on your Home and Contents Insurance policy won't be as high.
Can I get cover for my collection?
Most Home and Contents Insurance policies require you to declare your 'collections' separately. A collection can refer to anything from DVDs to stamps, which is why you should talk to your insurer and find out what you can put down as a collection. Note that if you don't declare your collections, you might not be able to file a claim for the entire amount you lost in the event your CDs or DVDs or are stolen or damaged. Keep in mind that you might have to take out additional insurance to properly protect all your valuable items since most insurance companies only offer limited coverage for such items, like jewellery or art.
Honesty is the best policy when applying
You need to be completely honest with your insurance company when purchasing or renewing a policy, when you're lodging a claim or when your situation changes.
How much insurance should I get?
Well, that depends on how much stuff you have or how much your home is worth. Do an inventory of the items in your home. Many people don't realise how much they own and when compiling a list of items, they tend to remember the big ticket items such as the furniture, the fridge and the home entertainment system.
However, it's often the small things you don't really think about that tend to add up. Losing your personal possessions, in part or in full, to theft, floods or fire can be extremely stressful and emotionally challenging, so the last thing you need is to worry about whether or not your policy provides sufficient coverage.
What is underinsurance?
Under Insuring your personal possessions can be a lot more problematic than you realise. You will often find that saving a few dollars on the premium by insuring your belongings for less than their replacement value will cost you a lot more in the long run. For example, your personal possessions are worth $40,000 but you decide to take out insurance only for $20,000 because you want to save some cash on the premium. If you lost all your goods due to a flood or a fire, for example, you would only receive $20,000.
However, there are other problems you will face. So, let's assume that you didn't lose all of your belongings. Instead, you lost $10,000 worth of possessions. Now, you might think you would be fine in this event because your policy is for $20,000, right? Unfortunately, it doesn't work that way. The insurance company considers that you only purchased Home and Contents Insurance for 50% of your possessions so they will pay out accordingly. In other words, instead of $10,000, you will receive $5,000 leaving you to cover the rest from your own pocket. This is why it is essential that all of your belongings are insured at their full and proper value, unless you want to find yourself shelling out a fortune to replace the remained of your belongings.
Case Study: Gina and Robert
Gina and Robert purchased their home using a home loan, which meant they had to insure the building. They decided to take things a step further and also took out a contents insurance policy. A few years down the line, there was a massive storm that caused some damage to their property. Despite the inconvenience and the stress, Gina and Robert weren't worried because they knew they were insured. However, when they filed a claim, they discovered that the insurer refused to pay out because they claimed that the leaky roof and damage to their floors and furniture were not covered by the policy. The company stated that the damage was due to Gina and Robert's negligence because it was owed to fair wear and tear as well as a structural problem and that they should have had their home fixed properly.
How do I file a claim?
To file or not to file a claim
Before you lodge a claim, you need to take the time to determine whether it's even worth filing a claim. This is because if you go ahead with a claim, it can affect your ability to obtain Home and Contents Insurance at a later date as well as how much the premiums will cost you in the future. You might also have to pay an excess, which is a certain amount of money you have to pay if you make a claim that you agreed to when taking out the policy. There are certain situations in which it might be better not to file a claim. Thus, if there is very little damage or the expense of repairing all of the damage is only slightly more than the excess, equal to it or below it.
How to increase your chances of having your claim paid
Ensure that your home is well maintained
Install deadlocks on your windows and doors, if you don't already have them
Get an alarm system
Claim for ACTUAL LOSSES only.
How can I prove what I lost?
In the event you are filing a claim, you will have to be able to prove what you lost, which means that you need to get proof to show ownership of the items that were lost, stolen or damaged. Things you could provide that would help prove ownership include;
- A credit card or bank statement with the transaction when you purchased the item
- Photos or DVDs and videos in which the goods are featured
- Statements from people who know about the items in question and have seen them.
The amount of evidence you will have to provide depends on what the claim is and its value. For example, for claims under a Home and Contents Insurance policy, the insurer will likely want expert reports detailing the causes of the damage, how much damage there is and what the proper way of rectifying the problem is. These documents will only become important if there is a dispute in reference to your claim.
What if I don't have the money to cover the cost of the excess?
The excess is the amount of money that you have to pay when filing a claim, which you agreed to when you took out the insurance policy. Basically, it's the insurer's way of making sure you contribute something to the cost of the claim. However, if you are experiencing financial hardship, you may not be in the position to cover the cost of the excess. If this is the case, you can request that the insurance company deduct the excess out of any money you are to be paid as a result of the claim. Alternatively, you can request to pay the excess in instalments. There is no valid reason for an insurer not to go along with this. The insurance company has no right to refuse to pay your claim simply because you are not able to pay the excess in advance. If the insurer won't work with you, then it is recommended to get professional advice.
Reasons your claim might be denied
Generally, there are four key reasons for which your claim might be denied.
- Non-disclosure. Non-disclosure means that the insurer may reject your claim because you haven't disclosed certain information when you took out a new policy, or applied to have your existing one renewed.
- Excluded event. Another common reason for which your claim might be rejected is because you didn't comply with the requirements of the insurance company or the policy does not provide coverage for the event in question.
- Fraud. If the insurance company thinks you have taken any actions that constitute fraud, they will deny your claim.
- Cancellation. Policy cancellation could be behind the denial of your claim.
Can I do anything if my claim is denied?
Under this section, we'll be looking at some of the more common reasons why an insurance company may reject your claim. It's a good idea to get professional legal advice for your particular situation.
If your claim was rejected for non-disclosure, it's important to remember that the insurance company is the one who is under obligation to prove that your non-disclosure should give them the power to reduce or reject your claim. Thus, if your claim was denied on the grounds of non-disclosure, you should:
- Send a letter to the insurance company requesting that they tell you what information they believe was withheld. This is because you might be able to argue that you did inform them of the facts in question or that there was reasonable cause for you not to disclose said information because of something the insurer did not tell you or ask you.
- If you are to blame and didn't disclose the information in question, demand that the insurance company send you a copy of their underwriting guidelines. This will allow you to determine whether or not they would have given you insurance had they known the information in question.
- Lodge a complaint with FOS before any time limits expire in case the insurance company doesn't give you an answer within a reasonable timeframe or takes too long to send you a copy of their underwriting guidelines. Keep in mind that if you arrange your policy over the phone, the call is generally recorded, which means the insurance company will have proof of what you said when you took out the policy. Furthermore, the insurer is obligated to send you all the information on your policy in writing within 14 days, which should also have a summary of everything you disclosed so you can verify and make corrections as needed.
Case Study: John and Roberta
John and Roberta have lived in the same house for the past 20 years. One rainy afternoon, they noticed that water was coming through the front door. John went outside and saw that the drain was overflowing. Despite the fact that they used every towel in their home to soak up the water and try and stop it coming into their home, things got even worse. The house began to flood, which led to ruined furniture, carpets and even the structure suffered damages. When John and Roberta filed a claim, they discovered that they didn't have coverage for flooding and their claim was rejected, meaning they had to cover all the costs, including repairs to the property and replacing all the damaged items.
What exclusions do I need to know about?
An insurance contract can contain various conditions and exclusions. Most Home and Contents Insurance policies also come with exclusions, which are situations or events the policy does not cover. Some of the events that might not be covered by your policy include:
- Fair wear and tear
- Damage caused by problematic design or poor construction
- Erosion, seepage, subsidence
One common exclusions is flooding. Many insurance companies do not provide coverage for damage resulting from floods or apply a lot of restrictions when it comes to the situations in which they will compensate you. Floods are generally considered to be the escape or overflow of water from a natural or man made watercourse, such as a river or canal, which leads to the covering of normally dry land. It is considered different to damage resulting from rainwater or storm water, meaning that the severity of the storm led to an accumulation of rainwater on the ground. If your claim is denied because the insurance company claims the damage was flood-related, then you will need to seek advice due to the fact that:
- There are times when the insurance company will agree to pay out on claims in situations in which a large number of people were affected
- If the damages were the result of both flooding and rain water, you could still get the insurer to pay out on your claim if, for example, the rainwater got into your house first or the damages were the result of rainwater getting into your home via a hole in the roof, even if floodwater also got into your home
- If both floodwater and rainwater entered your home and caused the damages, then the principle of 'proximate cause' applies, which states that if the damage is the result of two events, one of which is covered by the policy while the other is excluded, the insurer does not have to pay out on the claim. In other words, in this case, you would not receive compensation at all.
What if my home had an issue I wasn't aware of?
There are times when an insurance company will reject a claim because they state that the damage was the result of a defect the property already had. For example, the poor construction of the roof led to water getting into your home and damaging your floors. However, you'll be glad to know that Section 46 of the Insurance Contracts Act states that if you didn't know the problem existed at the time you took out the policy and any reasonable person wouldn't be aware of said problem, then the insurance company has to pay out on the claim.
Is gradual damage or wear and tear covered?
Insurance policies generally categorise 'wear and tear' as well as damages caused by not maintaining the property under exclusions. For example, a storm dislodges the tiles from your roof, so you file a claim. The insurance company could reject the claim, stating that the tiles had to be replaced anyway because they were old. The fact is that you need to maintain your home anyway and taking out an Home and Contents Insurance policy is not an alternative to proper maintenance. If the insurance company denies your claim on the grounds of wear and tear, you need to get the following proof:
- Proof to show that the damages in question were the result of an event the policy covers
- Proof that regular maintenance work has been performed as well as inspections
To be able to reject your claim on the grounds of fraud, the insurance company has to prove that you acted with the intent of misleading the company or were recklessly indifferent to whether or not the insurance company was being deceived. If the insurance company can prove you were attempting to defraud them, they have the right to deny your claim and cancel your policy, which means you are no longer insured. If the matter is serious, the insurance company might send the file to the police for further investigation and you could end up being charged with an offence. However, the insurance company cannot reject your claim on the basis of fraud if the fraud was trivial and it would be unfair for them not to compensate you. It's important to keep in mind that insurance companies are always vigilant when it comes to fraud. So, to reduce your chances of being under investigation, you should be as cooperative as possible, provide the company with all the pertinent information and offer proof, including photos and witnesses. If you are under investigation for fraud, your best course of action is to get legal advice as quickly as possible. Section 3.4 of the General Insurance Code of Practice states that insurers will only take into consideration information that is pertinent when making a decision on your claim, which is what they have agreed to. When referring to fraud, this section can have a wide range of interpretations. So, if you feel the insurance company is asking for too much information or details that are not relevant to the case or they are taking much too long with their investigation, file a complaint with the company. While you want to be assertive, don't overdo it because if you cross over into aggressive or rude territory, you will only put the insurer on the offensive, which will make things harder for you. If the insurance company is investigating you, some things that might help include:
- Staying calm
- Thinking about the questions you are being asked before giving an answer
- Requesting a break if you require one
- Request a digital copy or transcript of your interview with the investigator if it is being recorded
- Don't sign anything you aren't certain of
- Get legal help prior to the interview as well as after
An insurance company will sometimes void a policy in the middle of the coverage period, which could be a result of extra information you offered that makes the situation much too risky for the insurer to accept. Another common cancellation reason is failure to cover the cost of the premium on the policy in question. This is especially likely if you have chosen instalment payments for your premium made via direct debit and there was a problem with the direct debit. If the Home and Contents Insurance company informs you that your policy has been voided, you should seek professional advice on whether or not the insurer had a good enough reason to cancel the policy and if they followed proper procedure when it comes to ensuring you were informed of the cancellation, in compliance with their legal obligations. If you disagree with their cancellation decision or feel that you didn't receive proper notification of your policy being voided, you can file a dispute with FOS.Back to top
Tips and tricks to find better insurance and save money
The following advice might help you find a better Home and Contents Insurance policy for your needs and also save money in the process.
- Keep accurate records. You should keep records of any emails and phone conversations you have with your Home and Contents Insurance company detailing the different types of cover and what all the various definitions mean, just in case you have to file a dispute in the future.
- Compare a range of policies. Before you buy a home and contents policy, make sure you've looked at a handful of others and compared policy features and costs.
- Is your home in a high risk area? You should get in touch with the local council to see if you can get your hands on flood maps.
- Don't set and forget. Though tempting for the sake of convenience, don't renew your Home and Contents Insurance policy on auto-pilot.
- Look for discounts. You might also get a discount if you purchase your policy online, are a senior, a member of an auto club or if you install an alarm.
- Consider performing your own insurance evaluation. Check if there are potential dangers around the property that could cause damage or lead to an accident. For example, a leaky roof could lead to your claim being rejected so this is definitely something you should check.
- Evidence. Photographs are a good way to prove the great condition of the property as well as what the contents are, so make sure to take them regularly so that you have some proof available in case you need to file a claim.
Go with a broker
When looking for home and contents insurance, another option is to go with an insurance broker. While there are some negatives to using a broker, like they fact they only have a limited portfolio of products available because they sell on commission, there are also quite a few advantages. Firstly, a good broker really knows what's available on the market in terms of insurance products and he or she can translate the legalities into plain English, helping you understand exactly what you're getting. They might be able to tailor a policy to your specific circumstances and, because they want to make the sale and get the commission, they are generally quite willing to conduct negotiations for you and even give you advice if you have to file a claim. So, it's definitely a good idea to speak with a broker as well, when you are shopping around for Home and Contents Insurance.Back to top
Q. Am I covered if a defect of my home leads to loss or damage?
- A. You are covered only in the event that the defect was concealed and you did not know of it. You can't file a claim to be compensated for repairing the defect but you can claim to recoup the costs of the loss or damage it caused.
Q. If I rent a TV, DVD player or other items, will they be covered under my contents insurance policy?
- A. This depends on the conditions of your policy but if you have signed a rental agreement that stipulates you are legally responsible for the items you rented, then they are insured under your contents policy.
Q. Which policy do my carpets fall under?
- A. Carpets are considered to be contents and, as such, are covered by the contents insurance policy.
Q. If I am away on holiday, will my home still be covered?
- A. Your home is covered if you are away on holiday. However, if you leave your home unoccupied for longer than 60 days, you will have to pay an additional excess on any claim you file for events that occurred while the property was not occupied.
Q. If I take my contents with me while on holiday in Australia, are these items still covered?
- A. Your items are covered only if you temporarily remove the goods from your residence and take them to another home you have in Australia where you are staying temporarily or to a bank deposit box.
Q. What does my policy not cover?
- A. You will find this information in your PDS and the latest certificate of insurance.
Q. What is the maximum I can claim on my Home Insurance policy?
- A. This differs from insurer to insurer as well as according to the type of policy you chose. Speak to your Home and Contents Insurance company or check your PDS for these details.
Q. What is a new for old policy?
- A. Under a new for old policy, if your property or personal effects are so damaged they cannot be repaired or your personal belongings have been stolen, the insurance company will rebuild or replace the building or items in question, regardless of how old they were.
Q. Are the possessions of my visitors covered under my Home and Contents Insurance policy?
- A. This depends on your insurer and your policy but there are policies under which the personal belongings of people you have invited into your home are covered up to a certain limit. You can find out the limit by speaking to your insurer.
Q. Are tools of trade and home office equipment covered by my policy?
- A. This, again, depends on the insurance company and the policy. Some will provide a certain level of coverage while others won't.
Q. Is there any way I can save money on my premium?
- A. This depends on your insurance company but there are certain steps you can take:
- Some insurers will give you a discount if you work with them on all your policies
- Some companies will let you pick a higher excess, which will lower your premium
- Some insurers will give you a discount on your premiums if you meet certain conditions in terms of the security of your home.
Q. What does legal liability coverage represent?
- A. Legal liability provides coverage for your obligation to pay out damages as compensation for bodily harm another person incurs or for their death, or the loss or damage of their property, if the stated event is connected to you residing or being the owner of the property at the address that is insured. Legal liability on contents covers you for any event that leads to the bodily harm or death of another person or loss or damage of their property caused by items you own.
Q. How do I work out what the right level of coverage is?
- A. The goal of Home and Contents Insurance is to help you get back to the position you were before you had to file a claim. In other words, think of how much it would cost you now to replace items or repair your home rather than the amounts you paid when you first purchased the goods or how much they are worth used. Keep in mind that you are the one responsible for determining how much coverage you need so make sure you take the time to work out what the realistic figures are instead of just guesstimating.
Q. Which objects do I need to list independently on my policy if I want additional coverage for them?
- A. This depends on the insurance company but items such as jewellery, watches, hand woven carpets and rugs, paintings, works of art, antiques, sculptures, art objects, collections generally need to be listed separately if you want additional coverage. There are limits on how much you can insure each item for but these limits depend on the policy and the insurer, which is why it's best you talk to the company directly.
Q. What options do I have when it comes to insuring my jewellery?
- A. This depends on the Home and Contents Insurance company but some insurers let you insure your jewellery at home but also offer a portable coverage option, which means the items are covered anywhere in Australia and New Zealand. Of course, the latter costs more in terms of the premium you have to pay but at least all your jewellery will be safe. Note that in either case, these items generally have to be listed separately on your policy.
Q. How can I get a policy?
- A. This depends on the insurer but most allow you to get quotes online from their websites. The other option is to call them up or visit one of their branches.
Q. How can I pay my premiums?
- A. Insurance companies make it as easy as they can for their customers to pay their premiums, thus the majority offer multiple payment options, including:
- Online payments via their sites
- By phone
- Monthly payments that can be paid via credit card or deducted directly from your account
- In person at a branch
Q. What occurs when renewal time rolls around?
- A. Generally, the insurer will send you a notice of renewal about four weeks before you need to renew your policy. This letter includes the amount you have to pay, how you can pay and what you have to do next. The Certificate of Insurance will generally also be included. Make sure to check all the details and if the level of coverage still applies. To make changes, simply contact the company. To ensure you have full coverage, make sure you pay by the due date.
Q. Do I have to offer any extra information when renewing my policy?
- A. If things have changed in your situation and those changes could affect your Home and Contents Insurance policy, you have to inform the insurance company. Duty of disclosure also demands that you reveal any information that could impact your policy and the premium you pay or you risk getting your claim denied.
Q. How do insurers calculate premiums?
- A. Premiums are calculated according to a wide range of factors, including the number of overall claims the insurer has received, the level of risk you pose and much more. Thus, every time you renew your policy, you might find yourself paying a different premium, even if your situation hasn't changed at all.
Is there any way I can avoid having my property stolen or being burgled?
Installing security systems in your home can reduce the risk of theft and burglary. Some measures you can take include:
- Installing key-operated, two cylinder deadlocks on all external doors with hinges
- Installing key-operated locks or patio bolts on all outside sliding doors
- Installing key-operated single cylinder window locks on all windows that are easy to access
- Having security screens or grills fitted to all windows that are easily accessible
- Installing a back to base or local burglar alarm system.
How can I reduce the risk of fire?
A serious home fire can cause a lot of damage to your property and even the loss of life. There are certain measures you can take to prevent home fires, such as:
- Don't leave an open flame unattended
- Install smoke alarms and make sure they work
- Have a fire extinguisher in your home
- Clean the lint filter of the dryer on a regular basis
- Don't overload power points
These are just a few ideas but a quick look on your insurer's website will provide you with a lot more information on reducing the risk of fire and even what you should do to be prepared in the event of a bushfire or other natural disaster such as an earthquake, cyclone or flood. Remember, the insurer is interested in keeping you, your property and your belongings safe because that means that they won't have to pay claims so you'll definitely find comprehensive information regarding keeping your property and belongings safe on your insurer's site.
What can I do if there is water damage?
Water damage is one of the most common problems that leads to the damage of a property. However, in many cases, water damage can be avoided if you do a bit of routine maintenance. Some things you can do are as follows:
- Check under the sink for leaks on a regular basis
- Check the washing machine hose for cracking, fraying or other signs that it might spring a leak soon
- Check the connection of the icemaker in your fridge to the regular water supply to make sure it is fitted properly
- Don't flush thins down the toilet that don't belong there
- Get a plumber in to repair pipes and inspect your property for other problems
- These are just a few of the things you can do to prevent water damage.
Interested in applying for cover?
If you're ready to start comparing different options available from insurers, you can follow the secure links in the table above through to the insurers website and receive a quote for cover. Make sure you review the special offers available, you might be able to save even more on your cover.