Are you happy with your insurer? New research reveals home insurance tops complaints list

By Tara McCabe ·

New research data released by the Australian Financial Complaints Authority (AFCA), has revealed that home building insurance was the most complained about insurance product in the second half of 2019.

According to the statistics released on Tuesday, a significant 1,445 complaints were made about home building insurance between July and December last year. In fact, during these months, this particular type of insurance complaint made up over 30% of all general insurance complaints in Australia.

The area with the highest number of complaints by postcode was the suburb of Thuringowa in Queensland’s coastal city of Townsville. Of course, if you call Townsville home or you kept on top of the news in 2019, then this won’t come as a surprise. Flooding hit the city hard early last year, leading to an estimated $1.243 billion worth of damage, according to the Insurance Council of Australia. 

RELATED: Home insurance traps to watch for after Australia’s bushfire crisis

Common home insurance complaints include incorrect premiums, misleading information about a product, a rejected claim or a claim that your insurance provider may have hemmed and hawed for too long before making a decision and, if you gave your instructions, that they failed to adhere to them.

How can you avoid having your claim rejected?

If you’ve ever found your home insurance policy confusing or you’ve ever had an insurance claim rejected, then it probably won’t come as a big surprise that a lot of complaints can come from confusion with premiums and rejected claims. 

Here are a few things you can do to try and protect yourself from being underinsured:

1. Take out underinsurance cover with your policy

It may be hard to believe, but underinsurance is so common that you can actually opt for ‘underinsurance cover’ to protect yourself against an incorrect premium. With this type of cover you can potentially make a claim higher than the amount that your home is insured for, should you need to.

2. Don’t leave anything out!

One reason you may be refused a claim, is if you do not disclose something important when you put in your home insurance application. For instance, if your roof is damaged and you fail to let your provider know and the unthinkable happens and it caves in, your provider may refuse your claim on the grounds that it was already damaged. 

So even though a detail may seem small and insignificant, it’s always worth mentioning, after all it’s better to be safe than to have your claim refused.

3. Be aware of what is excluded from your policy

Most home insurance policies will have a number of exclusions, meaning certain events or instances won’t be covered under your policy. Common exclusions include:

  • Flood damage
  • Storm damage
  • General wear and tear
  • Animal damage

So if you live near a lake or in a coastal area then you may want to make doubly sure that your current home building insurance policy covers you for flood or storm damage. Just be mindful that if you’re doing renovations and you do have flood or water damage cover, then your claim may still be refused if your home is exposed to the elements.

RELATED: Home insurance traps to watch for after Australia’s bushfire crisis

4. Keep your policy updated

One reason why your home may wind up being underinsured is if you make improvements and fail to update your policy. You might build a top-notch conservatory, but if you don’t update your home building insurance policy, it won’t be covered.

It might even be a good idea to tell your insurance provider about any changes you’re intending to make, before you make them. That way they may be able to advise you on how it will affect your policy and whether or not you will be covered while the renovations are ongoing.

Not happy with your current home insurance policy? If you’re looking to switch or you haven’t yet made the plunge into the world of insurance, why not check out Mozo’s home building insurance comparison page to see what policies are on offer in Australia.

Compare home building insurance - page last updated September 12, 2020

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Tara McCabe
Tara McCabe
Money writer

Tara McCabe writes across all areas of personal finance here at Mozo from banking through to insurance. Tara is expert at practical money tips, showing readers ways to live richer and be socially conscious while doing it. She earned a BA (Hons) in English Literature from Canterbury Christ Church University.