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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.

A scene of a child who has accidentally thrown a ball through a window, breaking it. The child stands outside, looking surprised and apologetic.

What is accidental damage insurance?

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. 

Does home insurance cover accidental damage?

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.

What does accidental damage cover include?

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.

What is not covered by accidental damage contents insurance?

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.

How do I add accidental damage cover to my home insurance policy?

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. 

Is accidental damage cover worth it?

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?

How does accidental damage cover work?

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.

How much does accidental damage cover cost?

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.

Home insurance comparisons on Mozo

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Last updated 30 October 2024Important disclosures
Important information on terms, conditions and sub-limits.
  • Home Cover - Buildings & Contents

    Main events covered
    • fire
      Fire
    • theft
      Theft
    • storm
      Storm
    • flood
      Flood
    Monthly payments
    cost extra
    Calendar icon
    Yes
    Underinsurance protection
    Underinsurance protection icon
    Optional ExtraUp To 30% Of Buildings Sum Insured, Applied Automatically For Eligible Policies
    New for old
    replacement
    Replacement icon
    Yes
    Details
  • Home & Contents Insurance

    Main events covered
    • fire
      Fire
    • theft
      Theft
    • storm
      Storm
    • flood
      Flood
      Optional Extra
    Monthly payments
    cost extra
    Calendar icon
    Yes
    Underinsurance protection
    Underinsurance protection icon
    Optional ExtraUp To 25% Of Building Sum Insured
    New for old
    replacement
    Replacement icon
    Yes
    Details
  • Home & Contents Insurance

    Main events covered
    • fire
      Fire
    • theft
      Theft
    • storm
      Storm
    • flood
      Flood
    Monthly payments
    cost extra
    Calendar icon
    Yes
    Underinsurance protection
    Underinsurance protection icon
    No
    New for old
    replacement
    Replacement icon
    Yes
  • Home & Contents Insurance

    Main events covered
    • fire
      Fire
    • theft
      Theft
    • storm
      Storm
    • flood
      Flood
    Monthly payments
    cost extra
    Calendar icon
    No
    Underinsurance protection
    Underinsurance protection icon
    No
    New for old
    replacement
    Replacement icon
    Yes
    Details
  • Home & Contents Insurance

    Main events covered
    • fire
      Fire
    • theft
      Theft
    • storm
      Storm
    • flood
      Flood
    Monthly payments
    cost extra
    Calendar icon
    Yes
    Underinsurance protection
    Underinsurance protection icon
    Optional ExtraUp To 30% Of Building Sum Insured
    New for old
    replacement
    Replacement icon
    Yes
    Details

FAQ about accidental damage insurance

Does accidental damage insurance cover laptops?

Yes, most accidental damage policies will cover your laptop for situations like spilling liquid on it or dropping it while at home. However, there are certain situations where it may not be covered. 

Most policies won’t cover normal wear and tear, like an ageing battery or work keyboard. The same goes for mechanical issues; if your laptop dies due to an internal fault, your insurance likely won’t cover it and you’ll have to rely on your manufacturer’s warranty if you have one.

Additionally, whether your laptop is covered when you damage it outside of the home depends on your policy. Most policies will require you purchase an additional ‘portable contents’ insurance if you want to extend your cover to situations that occur when you’re out and about.

Does accidental damage insurance cover phones?

Yes, the situation is very similar to that of a laptop. You’re usually covered for accidental damage that occurs inside your home (spills, drops, etc), but you usually won’t be covered for normal wear and tear or for mechanical malfunctions. And if you want to be covered while out and about, you may need additional ‘portable contents’ insurance. 

Does accidental damage insurance cover items damaged during renovations?

It's important to know that most insurance policies won’t automatically cover damage you cause as a result of renovations. For DIY projects, it pays to notify your insurer who may be able to cover you for an added fee.

For large, professional renovations, make sure your builder has builder’s insurance (most legitimate builders should). That way, if they damage anything in your home as a result of renovations, their insurance will cover it.

Does accidental damage insurance cover items damaged while moving house?

If you’re moving homes, accidental damage is usually not your go-to in this situation. However, some standard contents insurance may cover you, but only if you've hired professional movers and usually for only a fraction of the item or items’ value. It will cover incidents that happen during the move like drops, theft and damage from a traffic accident.

If you're working with a moving company, your best bet is to ensure the mover has their own insurance. That way they’ll be the ones responsible if something goes wrong.

If you’re moving your stuff yourself, or just want more comprehensive protection, consider 'goods in transit' insurance. This is a separate policy made specifically for moving. It covers a range of scenarios, from simple drops to more serious issues like theft or fire.

As always, it's wise to comb through your PDS so you know what you’re covered for and what you’re not. And don’t forget to inform your insurer about your move.

Does accidental damage insurance cover items damaged by pets?

Most accidental damage policies don’t cover damage caused by pets, but some offer it as an extra add-on to protect against incidents like your pet chewing on furniture or scratching floors.

If pet-related damage is a concern for you, it's a good idea to speak directly with your insurance provider or find one that offers this protection.

Brad Buzzard
Brad Buzzard
RG146
Senior Money Writer

Brad brings over 25 years of experience in writing and consumer research to Mozo, using his RG146 certification for Generic Knowledge and Superannuation Brad has a knack for translating complex policies, to deliver practical guidance on financial matters. Brad has been featured in The Australian, B&T, Mumbrella, and Asia Insurance Review, and his insights have influenced the strategies of some of the world's biggest brands including McDonalds and Proctor & Gamble.


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