Accidental damage insurance: the ultimate guide

Picture a quiet day at home suddenly interrupted by a ball breaking your window - a classic case of playtime gone wrong. This is where accidental damage insurance shines. Unlike standard home and contents insurance, which covers you for things outside of your control, like theft and natural disasters, accidental damage insurance comes to the rescue for everyday mishaps, or dare we say, clumsiness.

Accidental damage cover is a type of insurance that specifically covers damages or losses caused unintentionally to your property or its contents. Because no matter how careful you are, accidents happen. 

Did your kids break a window playing catch? Did you shatter an expensive mirror while trying to hang it? Did you overload an electrical circuit and damage your appliances? These are the types of mishaps that accidental damage insurance will typically cover. 

A standard home and contents insurance policy usually doesn’t cover the types of accidents described above. It deals mainly with incidents outside of your control like theft and natural disasters. However, many home and contents insurance policies will offer accident protection as an add-on, meaning that for a few extra bucks, you can add it to your policy.

So if this is something you want, or think you may need in the future, it’s worth checking to see if your policy offers it.

Accidental damage insurance covers a range of mishaps unintentionally caused to your home or belongings. Here’s what it typically includes:

• Spills and stains. Damage from spilled liquids like wine or paint that ruin carpets, furniture or electronics.
• Breakages. Accidentally breaking items such as windows, mirrors or glass furniture.
• DIY accidents. Damage caused during home improvement activities, like drilling into a pipe or electrical wiring.
• Electrical damage. Issues arising from mishandling electrical appliances, leading to their malfunction.
• Dropped items. Dropping and damaging valuables like TVs, vases or kitchenware.

Keep in mind that cover varies among policies, so make sure to check your PDS for a full rundown of what’s included and what isn’t.

While accidental damage cover protects you in a wide variety of situations, it’s important to understand what’s typically not covered. Here are some typical exclusions:

• Normal wear and tear. Gradual deterioration and intentional damage are generally not covered.
• Mechanical and electrical breakdowns. This refers to internal malfunctions not caused by an external accident.
• Business-related damage. Damage occurring during business activities typically isn't covered under standard policies.
• Illegal activities. Any damage resulting from unlawful actions is excluded.
• High-value items. Items like expensive jewellery, fine art, and certain electronics may require additional coverage.
• Pet damage. Some policies exclude damage caused by pets, although you may be able to add pet damage cover as an add-on.
• Unoccupied homes. Damage in homes unoccupied for extended periods as per policy terms is often not covered.
• Items taken outside your home. Items you carry with you are usually not covered while you’re out, unless you have portable contents insurance.
• In-use items. Bicycles, sporting equipment while being used, and similar items might not be covered.

Again, make sure to review your PDS to understand what you are and what you aren’t covered for.

If you already have home and contents insurance, the first thing to do is check and see if your provider offers it as an add-on. If so, just give them a ring and ask to have it included. 

If your current policy doesn't include what you're looking for, your best bet is to shop around for a new provider who can offer a policy that better suits your needs. 

Remember, accidental damage insurance isn't usually a standalone option, except for certain high-value items or unique situations. So getting it bundled with your home and contents insurance is usually the way to go. 

Accidental damage cover usually isn’t that expensive so it can provide affordable peace of mind for most people. But some might get more use out of it than others. Here are some lifestyle factors that might make it useful for you:

• Kids in the house. Having children can often lead to more spills, knocks and general unpredictability around the house.
• Active homes. If your home is often bustling with guests or just has a lot of daily activity, the chance of accidental mishaps could be higher.
• Valuable belongings. Owning items that are expensive to repair or replace might make accidental damage worth it. Just be aware that some ultra high-value items like jewellery and expensive art might require a separate ‘high-value item’ add-on.

Ultimately, it boils down to a personal decision: how much risk are you comfortable with in relation to the cost of the insurance?

Accidental damage cover is like a safety net for those "oops" moments in your home. Here’s a breakdown of how it typically works:

• Activation. Once you add this cover to your home insurance, it's ready to go either straight away or from the start date you've chosen. Your updated policy will update you to any changes to your costs and any special terms and conditions.
• Filing a claim. If something goes wrong, like a wine spill on your new rug, the first thing to do is file a claim with your insurer. You'll need to tell them what happened and provide proof, like photos or a receipt for the damaged item.
• Assessment process. Your insurance company will then take a look into your claim. They might send someone over to check out the damage or ask for more info to work out if your policy covers it.
• Resolution. If your claim gets the green light, the insurer will work out the best way to fix the problem, whether that’s paying for repairs, replacing the damaged item, or paying you in cash.
• Paying your excess. Most claims require an excess, which is your part of the bill. This amount depends on what you agreed to when you bought your policy.
• Claim limits and conditions. Every policy has its own rules on how much you can claim and what you need to do to make a claim stick. Make sure you’re familiar with your PDS so you’re not hit with any surprises.

By familiarising yourself with this process, and fully understanding your terms and conditions, you'll be able to handle any claims with ease.

The cost of accidental damage insurance can vary widely from one household to another, depending on your individual circumstances. But as a ballpark figure, adding it to a standard home insurance policy could typically increase your premium by about 10% to 20%. 

For example, if your current premium is $1000 annually, with accidental damage cover, it could add $100-$200 per year to your premium (or $8-$16 per month). However, this can be higher for high-value properties or in high-risk areas. 

Here are some factors that could influence the price:

• Value of insured items. More valuable possessions lead to higher premiums.
• Level of coverage. Broader coverage usually costs more.
• Risk factors. This includes the home’s location, type, security measures and your claims history.
• Excess amount. Opting for a higher excess can lower your premium.
• Insurance provider. Prices vary between different insurers.
• Discounts and deals. Some insurers offer discounts for things like bundled policies or installing security systems.

To get a more accurate cost for your specific circumstances, it's a good idea to get a few quotes from several different providers. 

To make things easier, we’ve compiled a list of a few quality home and contents insurance providers who offer accidental damage cover.