Home and Contents Insurance Australia

Important Things To Know About Home and Contents Insurance [Australia]

Your home is likely your most valuable asset, so it’s important to make sure it and your belongings are properly protected in the event of an accident, natural disaster, or other insured event.

Home and contents insurance in Australia can give you peace of mind by knowing that you’re covered financially if something happens to your home or possessions.

Here are some important things to know about home and contents insurance to help you choose the best coverage for your needs.

Home insurance can cover your dwelling and attached structures

Home insurance is an important accompaniment to homeownership. Not only does it provide peace of mind, but it also protects your most significant financial asset—your home!

Home insurance policies can cover the rebuilding costs for a variety of areas, including your dwelling and any other structures attached to the house. This could range from garages and sheds to porches and gazebos.

If you think these structures are not protected under your general homeowner’s policy, then you should check with your provider since coverage may differ based on the contract terms of your policy. It’s always best to be prepared with all the facts and secure ample coverage so that in the case that your home is damaged, you know that additional costs will be covered.

Contents insurance protects your personal belongings inside your home

Having contents insurance can bring so much reassurance when it comes to protecting your belongings from damage, loss, or theft. It gives you the assurance that any items you hold dear and value will be secure.

Contents insurance covers almost all of your personal things inside your home and depending on your cover, can even include items you might take away with you such as mobile phones, laptops, or jewellery.

So whether you have a treasured family heirloom or an expensive piece of tech equipment, contents insurance can act as an extra layer of protection.

Plus if you need monetary help owing to any repairs or replacements, the cost could be covered by your policy – giving you a little backup should something unfortunate occur.

Many home insurance policies cover replacement costs

Home is an important place, and it’s always important to have the proper insurance in case something unexpected happens.

Many home and contents insurance policies cover replacement costs so homeowners can rest easy knowing that whatever items are damaged will be replaced with equal value.

Replacement cost means exactly what it implies – the cost of replacing or repairing any given item if it was being bought today. This measure helps ensure that the replacement will be subject to industry technology updates or price increases and ensures fairness when making a claim.

Though no one likes to think of bad things happening, injury or damages to you, your home, or your possessions can occur at any time so it’s important to make sure you’re covered with the right replacement cost policy.

Some home insurance companies offer discounts for bundles

Home insurance companies often offer homeowners a great way to save money – that is through bundled policies.

By combining your home and contents insurance into one policy, many home insurance providers will offer a discount. This makes it much easier to keep track of all your coverage needs, while taking advantage of the lower cost benefits at the same time.

So if you’re looking for ways to save on your home and contents policy premiums, make sure to check if your insurance provider offers a bundled plan. It can really help save on premium costs in the long run!

You may also be able to get discounts for installing security features

Protecting your home should always be a priority, and what’s better is that you may be able to get discounts for it?

Installing smoke detectors, deadbolts, and other security features can not only give you greater security, but they can also save you money on your insurance premiums.

It’s easy to take advantage of this – just check with your insurance provider to see what types of discounts are available for adding these valuable measures to the home. Investing in security measures is always a worthwhile choice, so why not make the most out of it?

It’s important to shop around and compare rates

Shopping around for the best rate on home and contents insurance can save you time and money in the long run.

Business Insurance Consulting has a wealth of experience helping households secure appropriate coverage for their needs so it’s important to make use of this great resource if possible.

Comparing rates between companies can have a huge impact on the premiums you pay so take time to look into this before pulling the trigger. Not only will you often find lower premiums due to shopping around, but you’re more likely to find an insurance plan that suits your needs better.

At Business Insurance Consulting we specialise in helping businesses and individuals find the right coverage for their circumstances. To ensure your home and contents are sufficiently protected, visit our website or contact us today to get started!


Business Insurance Consulting – https://businessinsuranceconsulting.com.au/home-and-contents-insurance/

Home insurance and ‘side hustles’: how worried should we be?

There’s momentum building on an insurance issue that could theoretically invalidate thousands of home and contents policies, and has consumer groups throwing around accusations of “junk” cover.

When customers take out home and contents policies they are invariably asked if any business activity takes place at the home. If the answer is no, and that’s not accurate, or it later becomes inaccurate, there’s a serious risk of claims being denied.

At first glance it doesn’t seem that different to any other non-disclosure issue, and if consumers are dishonest, or careless with the truth, or fail to tell their insurer about changed circumstances, then the consequences are on them.

There are also very good reasons why business activity increases risk – even extra visitors to the home adds to liability concerns – and if insurers don’t want to take that on, well, that’s up to them.

But is it quite that simple?

There are estimated to be hundreds of thousands of Australians carrying out some form of business activity from home, especially since covid. And business activity can be quite difficult to define.

Recent examples highlighted by ABC News where claims have reportedly been denied or cover withdrawn include eggs being sold from an honesty box, bike repairs taking place in a garage, and a food truck parked at – but not trading from – a home address.

One broker told insuranceNEWS.com.au that a pensioner client of his was informed that continuing to sell $5 worth of eggs to his carer every month would force the cancellation of their home and contents policy.

While we may not have all sides of every story, and insurers are entitled to decide which risks they want to pass on, these articles don’t pass the all-important “pub test”. And the more stories that are told, the more this threatens the industry’s reputation.

Consumer Action Law Centre CEO Gerard Brody told the ABC that if a consumer has a policy that was never going to provide coverage, it’s “effectively junk” and insurers need to “look at the fairness of what they’re doing and come up with a better solution for their customers”.

Politicians are getting in on the act too, with ACT Independent Senator David Pocock writing to the Insurance Council of Australia, Financial Services Minister Stephen Jones and others.

“There is a real issue here,” one industry source told insuranceNEWS.com.au.

“Lots of people will be doing little business activities for modest amounts of income. I wouldn’t be surprised if ASIC turned around and wrote a letter saying ‘review your home book and let us know the extent of this issue’.

“It’s something that the industry needs to think through just to satisfy ourselves that there isn’t some great big latent systemic issue out there.”

Bringing us back down to earth is that fact that we haven’t heard about many claims being denied on this basis.

Insurers are paying out hundreds of thousands of home claims in the wake of a spate of natural catastrophes – and if flood claims were being denied en masse on the basis of undisclosed garage sales or fresh produce honesty boxes, we would surely have heard about it.

Insurers don’t appear to be actively investigating such activity, and in most cases, how would they even know about it?

The Australian Financial Complaints Authority (AFCA) says complaints about the issue are not common, pointing to only one relevant determination in recent years.

That case related to a fire caused by undisclosed jewellery manufacturing taking place in a garage.

The complainants thought it was more a hobby than a business, but AFCA pointed out that income was generated, there was a business bank account and an ABN.

Some have flagged the fact that the duty of disclosure changed on October 5 last year to a duty to take reasonable care not to make a misrepresentation.

This swings the balance slightly in favour of consumers, and means the insurer needs to ask questions clearly and specifically, and communicate to the insured the importance of answering correctly, and the possible consequences of failing to do so.

However, it may not have much impact on this issue. Answering a question about business activity inaccurately is probably going to fall foul of either duty. And the same applies to not updating a previous answer on renewal, so long as the insurer has issued the renewal notice correctly.

Contrary to popular belief, the claim would not have to be directly related to the business activity for the insurer to deny it.

But under the new duty the insurer would need to prove that a misrepresentation had occurred, that reasonable care was not taken, and that, had it known about the undisclosed matter, it would not have offered cover in the first place.

“It comes down to the basis of the insurer’s denial,” AFCA’s Senior Ombudsman General Insurance Chris Liamos tells insuranceNEWS.com.au.

“If it’s a non-disclosure or a failure to take reasonable care not to make a misrepresentation, they don’t necessarily have to prove a link between the claim and the non-disclosure.

“What we are looking at, because it’s a precontractual issue, is what would the insurer have done differently, and what’s the prejudice that they’ve suffered.

“The insurer will still need to step through how it would have affected them. If they still would have issued the policy on the same terms then they can’t deny a claim on that basis.

“If they would have charged an additional premium they can deduct that from the claim, or if they would have applied an exclusion that wasn’t applicable to the claim then there is no prejudice.”

As to how business activity is defined, AFCA would first look for definitions within the policy. If there were none, it would move to the ordinary meaning of those words.

Mr Liamos admits “it’s a difficult one” and there are some “grey areas”.

“If your kid is selling lemonade at the front door, that would be a big stretch to say that’s somehow a business.

“On the flip side, if you’ve got a situation where someone has got an ABN and a fairly large turnover they are generating from their home, that might be less controversial.

“We would be looking at what would be the ordinary consumer’s understanding of that term in the context of the policy wording. Then we would look at the specific activities of the insured that the insurer is saying falls foul of the language.”

Does simply working from home as a paid employee cause a problem? You’d think not, but can anyone afford to make assumptions?

One industry source suggests that policies may need to introduce greater clarity – and refer to specific income thresholds or activities.

And however daft some might think it is, insurers have every right to decline to cover home and contents customers due to low-level business activities, if that’s what they want to do.

“They have a commercial discretion as to what they’ll insure and under what circumstances,” Mr Liamos says.

“If they want to be strict about certain types of business they don’t want to insure then generally they are entitled to do that.”

The advice to consumers is, as ever, read the Product Disclosure Statement. If a customer is unsure about anything, they should give the insurer a call.

Don’t assume something relatively minor doesn’t matter – it might. And if something changes, they should tell their insurer immediately, and pay attention at renewal time, making sure to check that the answers previously given are still accurate.

A little extra cash can go a long way in easing the pressure as the cost-of-living rises. But it’s not worth invalidating insurance on your biggest asset.

And as far as the industry goes, prepare for more scrutiny on this issue – especially if more people decide to tell their story to the ABC.