The #1 trick for tanking your home insurance claim, revealed in a new report

By Brad Buzzard · · 3 min read
Fact Checked
Panicking couple in despair sitting on a sofa watching water dripping into buckets in their living room

Want to ensure your home insurance claim gets denied? The new Home Care report from Allianz tells you exactly how: focus your home upgrades on aesthetics over maintenance. 

According to the report, Aussie homeowners currently spend and average $3,400 on upkeep. However, this might not be enough to stave off the tens of thousands they could be out-of-pocket due to preventable issues. 

That’s because we’re focused on the wrong things. Instead of preventative care, 39% of homeowners are prioritising a 'personalised space'. This contributes to a risky culture of neglect where 40% of us take a 'set and forget' approach, backed by a belief from 50% of homeowners that it's better to simply 'deal with issues as they arise'.

“Many Australian homeowners appear to be prioritising aesthetics and well-designed spaces, but I’d like to see practicality and ongoing upkeep become just as much a part of the conversation,” said Rebecca Cardamone, founder of Ace Properties Agency.

The report goes onto state some examples of small fixes that can stave off massive financial headaches:

  • Replacing a simple flexi hose. Ignoring this $20 part can cause up to $30,000 in water damage. An Allianz trial found nearly one in five flexi hoses in customers' homes were already corroded or damaged.
  • Getting a roof resealed. The report estimates that a minor reseal costs about $500, while ignoring the problem can lead to a bill of $10,000 or more in water damage.
  • Keeping your gutters clear. This simple job can help prevent internal water damage from storms. The report notes that (the oft denied) insurance claims for this kind of damage often exceed $15,000.
  • Regularly checking smoke alarms. The report calls this a basic safety check that can help to prevent a serious fire. A complete rebuild of a home can cost hundreds of thousands of dollars.

Perhaps it’s most important to note that insurance claims related to many of these issues can be denied, since insurance is for sudden, unexpected damage - not gradual damage or damage due to lack of maintenance. 

“It’s important that homeowners are aware that maintaining their home is a responsibility under their insurance policy. With most insurers having a general exclusion for ‘wear and tear’, the financial impact for homeowners could be significant if issues aren’t addressed early,” said Luke Whenman, Allianz Australia Chief Claims Officer.

Home insurance is not the same as a warranty

This is where many homeowners get caught out. If a storm damages a perfectly good roof, your insurance will usually cover the roof and everything that gets damaged inside. But not so much if that roof is in disrepair and it’s found that the damage would have been preventable with some basic upkeep.

Here are some other examples where lack of maintenance or slow moving problems can become an insurance headache later:

  • Termites and other infestations. Damage from infestations occurs over the course of years. You’re expected to deal with infestations well before they lead to damage.
  • Slow-growing mould. Mould damage on its own is usually the result of failing to deal with leaks or poor ventilation - things you should have handled from the beginning. 
  • Tree root damage. Issues arising from tree root damage is again, something you should have been able to see coming well before it led to damage. 
  • Clogged gutters. Damage from blocked gutters is a direct result of failing to perform a routine and necessary part of home upkeep.
  • Unrepaired leaks. Don’t expect your insurance to pay for damage due to leaky pipes that you ignored until it was too late.

Now of course, there are exceptions to the rule. For example, if you get a mould infestation as a direct result of a covered event like a storm, and everything else is above board, you’ll typically also be covered for any resulting mould damage. 

But the best thing for you to do is to check the product disclosure statement (PDS) for your home insurance policy. It will spell out when you’re covered and when you’re not. 

And for goodness sakes, replace that corroded flexi hose!