What you need to know about Home Insurance payouts

What you need to know about Home Insurance payouts

One of the most essential policies for homeowners is home insurance. That’s because if your home burns down or is severely damaged by storms for example, without insurance, you have to pay for the repairs or replacement of your home. For most Australians, buying a home is their biggest financial purchase and their biggest asset, so losing it all in a matter of hours is devastating.

Let’s take a look at what home insurance actually covers, what questions you need to ask and how you can make a claim against this policy.

What does home insurance cover?

This type of insurance covers homeowners against loss or damage to their home. It not only covers the home dwelling itself, but also any garages and outbuildings that can be locked. It also includes coverage for permanent fixtures, such as light fittings and built-in wardrobes, as well as fences and in-ground swimming pools.

Home insurance usually covers homeowners for fire, theft and storms, but not always for floods. Theft, vandalism, malicious damage, explosions and sudden impacts are also generally included. It’s important to know that your home insurance also includes legal liability in the event that an individual is injured or their property is damaged whilst in your home or on your land.

What questions do you need to ask?

As a homeowner, you need to know exactly what is covered under your home insurance policy. You want an itemised list of this coverage, as well as the excess that’s required for each of these items. The excess will be dependent on your premiums, so you can ask about reducing these excess payments, if you are happy to increase your premiums. You also need to know whether the insurer provides a guarantee for any repairs that may be undertaken via the claims process.

Another question to consider is how much insurance cover is enough? You need the replacement costs for your home, but what about temporary accommodation if your home is destroyed? What about surveyor’s or architect’s fees for building a replacement home? Even clearing the site after your home is demolished can be expensive, so who pays for that?

How can you make a claim?

Your first step when making a claim against your home insurance policy is to contact your insurance adviser or insurance provider. You might not have all the information they need right then, but it keeps them informed and starts the claims process. Next, download the claim forms from their website and then complete these forms (if you have an insurance adviser, they will manage this for you). You will need to include photos or videos of the damage and any police reports. If items were stolen or damaged, then you need brand names, model and serial numbers, as well as receipts or valuations of the items. Keeping damaged items, rather than disposing of them, is also a good idea. Always ask whether there is a deadline for submitting your claim and make sure to file your claim as soon as possible. Your insurer should reply within 10 business days. The benefit of having an insurance adviser means they can manage this process for you, meaning you have one less thing to worry about during this difficult time.

Knowing what type of cover you need to protect your home, what questions to ask potential providers and understanding how to make a claim, can all help to smooth the way to a successful claim being processed.

To speak to an insurance adviser about your home insurance policy, find your local adviser.

General Advice Warning

The information provided is to be regarded as general advice. Whilst we may have collected risk information, your personal objectives, needs or financial situations were not taken into account when preparing this information. We recommend that you consider the suitability of this general advice, in respect of your objectives, financial situation and needs before acting on it. You should obtain and consider the relevant product disclosure statement before making any decision to purchase this financial product.

Home Insurance

For most people, the family home is the largest asset they’ll ever own. This means it is essential to protect it, inside and out, with the right insurance cover. After all, no one wants to discover they’re inadequately insured when it’s too late.

Home Insurance

What is Home & Contents Insurance?

Home and contents insurance covers the cost of repairing or replacing your house and your belongings when something goes wrong, like a fire, burglary or a visitor gets injured.

For many Australians, owning a home is a dream come true. After years of toiling and saving up, we all look forward to the day when we can live under a roof that we can proudly call our own. So, it’s important to get the right type of insurance.

Insurance is financial protection in the event of disasters like severe storms, an earthquake or fire happening. Trees falling or hail damaging roof tiles happen and can cause severe damage to our beloved homes. Insurance provides both financial security and peace of mind.

Why is Home Insurance important?

Our home is often our largest asset, so it’s important to find the right home insurance that can pay the often-large costs of repairs or rebuilding. Contents insurance is usually purchased along with cover for the building. So, if the roof is damaged in a storm and water causes damage to the interior furniture or clothes, it’s all covered by the same insurance company. This type of insurance will also pay the costs of moving temporarily and putting contents in storage if the house is so badly damaged it cannot be lived. Banks and finance companies also require this type of insurance when you borrow from them.

What does Home Insurance cover?

Standard homeowner’s policies typically cover a list of insured events, like Fire & smoke, storm, cyclone, rainwater, explosion, burglary and vandalism. Other insurance companies offer more than the standard cover, for example, accidental damage, motor burnout and artwork or valuables taken outside the home. It’s also important to check and compare insurance policies, as they vary, some cover damage to retaining walls, landscaping, and flood and water leaks, others don’t.

Checking and understanding what is covered and what is not covered (often called an Exclusion) or what limits some items have, for example, jewellery may only be covered up to $1,000 per claim unless items are specifically listed is the key to understanding the insurance you purchase.
Before you purchase insurance, we recommend checking:

Cover type – is it a standard cover (listed events), or accidental damage cover.;
Will the home be your main residence or a holiday home;
How much cover is there for jewellery or special items;
Have you used a free online calculator to find out the rebuilding cost of your home and the replacement value of the contents;
Do you need cover for bikes or other sporting equipment;
What is the condition of the home, most insurers don’t pay for water leaks from cracked tiles or rusted gutters.
The location of the home - is it in a flood or bushfire-prone area, some insurers may not cover certain streets or suburbs.

Having the right insurance cover can really help if the worst occurs. The insurer can arrange repairs and alternative accommodation, if needed or pay legal defence costs and damages awarded by a court if someone is injured on your property. Having the incorrect type of cover could mean you have to find the money to pay for these things.

At Insurance Advisernet, we’re prepared to help you ensure the valuation of your home and contents are up to date. Our professional advisers will also discuss your needs and advise which insurer and type of cover best suits your needs and budget. Talk to one of our representatives today!

Frequently Asked Questions

● How much does home & contents insurance cost?

The average home & contents insurance cost, as well as the cover varies around Australia. In NSW, the average is around $110 a month, in Victoria $100 a month, with Queensland can vary from $120 to $360 per month for Far North Queensland, so it pays to get quotes from different insurance companies and different levels of cover. Premiums will vary based on location, what the home is built of, the age and type of occupancy and past claims experience.

● Is home insurance mandatory?

No, however, banks or finance companies will require home insurance to ensure you can have your home repaired or rebuilt if damaged. It’s also common sense to ensure what are most people’s most valuable assets and are they protected in the event of storm or fire.

● What 3 areas are covered in a typical homeowner’s policy?

There are typically 3 areas covered by a homeowner’s insurance plan:

Building – This covers the house and any carports or garages, as well as the fixtures and fittings, like pipes and carpets. Basically, anything that you wouldn’t take with you when you sell the home. As mentioned, some policies cover any type of accidental damage, while others more limited cover (and cheaper) for fire and listed perils, including wind, rainwater and storm damage.
Contents – this is anything you would take with you when you leave. Rugs, furniture, beds and sporting equipment.
Valuables – contents policies only provide very limited cover for jewellery, bikes were taken away from the home or artwork. So, it is important to understand the difference between insurance policies and what suits you.

● How do I know how much homeowner’s insurance I need?

Nothing is set in stone, but some major factors to consider are the square foot measurements of the house plus the construction costs to rebuild damaged or destroyed houses. With Covid related shipping delays and inflation, the replacement costs of both the home and contents have increased 10% - 25% over the past year, so it’s key that you get good advice and check with an up-to-date online calculator. If you don’t have enough insurance cover, you may end up paying for part of the repairs, which could be expenses and delay the work.