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What's a PDS? Home and contents insurance jargon buster

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There's no doubt about it, home and contents insurance providers love their mumbo jumbo. If you're struggling to get your head around some of the home insurance lingo (and really, who wouldn't) our jargon buster is here to help.

Accidental Damage (vs. Defined Events)

In a defined events policy the insurance provider will list the specific events they will provide cover for usually including Fire, Storm, Burglary, Impact, Glass Breakage, Earthquake, Malicious Damage, and Lightning. Accidental Damage is a higher level of cover and typically more expensive as it takes into account a much wider range of incidents (like spilling red wine on the carpet or a plasma TV falling off the wall.)

Building Replacement Value 

This is the amount it would cost you to completely rebuild your house at current prices.

Duty of Disclosure 

You have a duty to tell your provider everything you know that is relevant to the insurance company decision to insure you. The information you supply will affect the amount of your premium, and special conditions and whether your insurance provider will insure you. Failing to tell your provider something relevant could result in a claim being reduced or refused.

Excess 

This is the amount you have to pay yourself towards each incident if you make a claim. Usually your insurance provider will deduct the excess from the amount of cover they would pay you under your policy and then pay you the remainder.

Flood Cover 

Defined as damage caused to home and contents caused by rain which results in pooling, overflowing or spreading of rainwater, usually from a river. This is quite separate from damage caused by the sea or faulty plumbing. It's really worth checking the details of this with your insurance provider, as runoff from excess rainfall may not fall under their definition of a 'flood'.

Fusion 

This is the burning out of an electric motor or its wiring caused by the electric current in it. Items that may be subject to a fusion claim include washing machines, refrigerators, clothes dryers, freezers and pool motors.

New for Old 

If your home or contents are damaged or stolen, a new for old policy means your insurance provider will replace them with new items or repair them with new materials available at the time of replacement from Australian suppliers.

Optional Cover 

This is extra cover that goes above and beyond a standard policy. You can ask your insurance provider to add optional covers to your policy for example, to cover jewellery, indoor plants, or an heirloom spoon-collection.

Premium 

A premium is basically the amount you pay your insurance company for insurance.

Product Disclosure Statement (PDS) 

A product disclosure statement (PDS) is the name of the document that contains all the important terms and conditions relating to your insurance. It tells you what cover is provided and lists costs, fees and charges. It's vital that you read this document cover to cover before you sign up with an insurance company.

Storm Cover

This is coverage offered for damage rising from a storm, such as fallen trees, hail damage, water damage, downed powerlines, and so forth. Your provider may want to ascertain that the damage didn't arise because of bad maintenance (i.e. you didn't clean your gutters), so make sure you keep your premises well maintained and prepared for stormy seasons. 

Sum Insured 

This is the largest amount you could claim from your insurance company under the rules of your policy.

Now that you're armed with a better understanding of your home insurance fine print, head over to check out some of today's home insurance offers.

Compare home and contents insurance policies - rates updated daily

Search promoted home insurance below. Advertiser disclosure. Important information on terms, conditions and sub-limits.
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Evlin DuBose
Evlin DuBose
RG146
Senior Money Writer

Evlin is RG146 certified for Generic Knowledge and has become a leading voice in finance news since joining Mozo two years ago. She is regularly featured in Google's Top Stories alongside major publications like News.com.au and Yahoo Finance, and seasoned journalists. Despite being in the industry for just two years, she is Mozo's go-to writer for all things RBA and her research has been referenced by the Victorian Government. With a Bachelor of Communications degree from UTS, where she won the Dean's Merit Award and acted as the Director of Student Publications.

* Terms, conditions, exclusions, limits and sub-limits may apply to any of the insurance products shown on the Mozo website. These terms, conditions, exclusions, limits and sub-limits could affect the level of benefits and cover available under any of the insurance products shown on the Mozo website. Please refer to the relevant Product Disclosure Statement and the Target Market Determination on the provider's website for further information before making any decisions about an insurance product.

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