Home & Contents Insurance Tips and Traps

Whether you’ve built it from scratch or picked it up at an auction, our home is the most expensive thing we own. So the last thing you want is to find out you’ve forgotten to add or misjudged something on your home and contents insurance policy, like underinsurance.  

That’s why we’ve pulled together this guide to make sure you’re understand all the ins and outs of home insurance, so you’re not left out of pocket. Check it out.

Tips

• Reading and then re-reading your policy Product Disclosure Statement will take a couple of hours out of your life that you’ll never get back, but it’s well worth it if it could spare you a financial disaster. 
• Make sure you assess your level of cover regularly and take into account any changes you have made to your property, like renovations or installations. 
• Avoid automatically renewing your policy. Get a few quotes (including one from your current insurer) and ask them to match the deal they offer for new customers. You can also often get discounts for buying your policy online, installing an alarm or being a senior!
• Check what insurance is counted as included and what counts as optional cover. Some policies allow you to buy extra cover for an additional amount to cover elements like burnout of electrical motors, temporary insurance or pet cover.
• A lot of insurance companies now include flood cover, regardless of where you live. But there are some insurers that still include it as an optional extra, so make sure you know where you stand. 
• Keep good records by taking photos and compiling an inventory of your home’s contents and store it somewhere safe, so you can give them to an insurance assessor if you ever have to make a claim. 
• If you're an investor, you've probably already encountered landlord house insurance. If not, it's time you did! Landlords insurance is more than straight home insurance minus the contents cover as it also protects you for a range of extras relating to lost rent or troublesome tenants.
• Think twice before you claim because claims, big or small all affect your future insurance quotes. In some cases it doesn't matter if you claim for $1000 or $100,000 - your premium will still rise by 10% or more.

Policies by different operators vary dramatically in terms of what they cover double check whether your policy includes:

• Accidental damage
• Smoke damage
• Property being renovated
• Impact (such as a car hitting a wall)
• Replacement locks if you lose your keys
• Earthquake damage
• Flood damage

Traps

• Many insurers won't cover events which occur if your home is unoccupied for more than 60 days. Be sure to tell your insurer if your home will be left unoccupied for an extended time. 
• Make sure your home is properly maintained - some insurers insist that you have deadlocks on your doors and windows.
• Not all contents insurers cover you when you’re moving house, some will, but only in certain situations, for example, if they’re damaged in a car accident.
• Consider what valuables you have in your backyard - that state of the art six burner barbeque might not be covered for theft or storm damage.
• Watch out for 'watery interpretations' - water damage is a really problematic area of fine print for home and contents insurance. Premiums are very expensive for flood-prone areas as insurers often know more than you do about the risks to your intended home. Check with the local council to see if flood maps are available. Also, leaky roofs are a common cause for claims-denial so make sure your property is properly maintained.
• Home insurance policies won’t always cover business activities and assets, so if you work from home, you may need a separate business insurance policy.
• If your property is underinsured - eg, if it would cost $500,000 to rebuild, but you've only insured it for $400,000, or 80% of its value - then your insurer can apply averaging to any partial claim. This means that if your $10,000 shed burns down, your claim will be 'averaged' at 80%, and your payout will only be $8,000 - leaving you to pay the rest of the cost of rebuilding it.

Ready to find the policy that’s right for your home? Check out our home insurance comparison page to see what’s on offer.