Home Insurance – What You Need to Know

September 10, 2015

Home Insurance generally takes on two forms in Australia; Insured (Defined) Events and Accidental Damage.

You may or may not recognise these terms as just about every insurer calls their cover something different – like Silver or Gold cover, Classic or Elite, Basics or Extras, and so on. They’re all essentially the same two levels of cover dressed in different clothes.

What is important to know about Home Insurance is where the differences lie between the two levels of cover and the multitude of different products out there in the market right now. You can have the same sums insured (the replacement value you set for your buildings and contents for example) and the same excesses, however the disparities are found in the terms, conditions and exclusions of each policy as well as any additional benefits that the insurer includes in the policy wording.

This is why when you are quoting a number of insurers, it is crucial to read the Product Disclosure Statements (PDS) and thoroughly compare the products to ensure you understand what you’re getting for your money. We hear from clients all the time that direct insurers claim the policies are “exactly the same” as their broker based product, and while the sums insured are, the fine print almost never is. This is the biggest trap we see and it’s often not until claim time that you find out what you were told was a comparative policy, isn’t.

So what’s the deal with the two levels of cover?

Remingtons is an IBNA (Insurance Brokers Network Australia) member and as such, we have access to specifically tailored broker policy wordings. Let’s have a look  at what they’re covering you for;

Insured (or Defined) Events*

  • Fire or explosion (this includes bushfire as well as internal house fires)
  • Storm (including cyclone/hurricane, and/or rain, which may be accompanied by snow, sleet or hail)
  • Lightening strike or thunderbolt
  • Earthquake or tsunami
  • Theft or attempted theft/burglary
  • Deliberate or malicious acts
  • Water damage (bursting, leaking or overflowing of water from fixed apparatus or pipes, basins and shower bases)
  • Impact
  • Glass breakage
  • Fusion of an electric motor
  • Power surge
  • Spoilage of food

The IBNA Insured Events wording is standard across all major insurers (CGU, QBE, Allianz and Vero) and includes a host of additional benefits built in to the wording that are often not included (or are for extra premium) under direct insurer policies. The sub-limits (the amounts the insurer pays up to for each section) also vary significantly from direct insurer policies to our IBNA policies and you should always be aware of what these are when selecting your cover.

A typical Insured (Defined) Events policy will not cover your contents or valuables away from your home. You do have the ability to list valuables on your schedule to cover them for accidental damage however this does increase your premium.

The Insured (Defined) Events level cover is great for covering off the bases and making sure when it comes to a large loss (like a typical Ballarat hail storm), you’re protected adequately and able to get back on your feet. The additional benefits included in the IBNA policy wording are also fantastic – there is cover for contents in storage, extra costs of reinstatement, illegal use of credit cards, visitors contents, replacement locks and keys, contents being conveyed to a new residence, loss of documents, taxation audit and many more.

Accidental Damage*

  • All of the above Insured Events
  • Plus, any accidental loss or damage to your home, contents or both at and away from the insured premises (this includes property that belongs to your family or for which you are legally responsible for).

This one is pretty simple, yet very comprehensive. This level of cover means your contents or valuable/portable items are covered Australia wide (and in most instances, overseas for a period of time) – this level of cover is fantastic for people who love to travel, grey nomads and  families with students who live away from home as their contents are covered under the home insurance, for the same full accidental level of cover.

The cover also provides cover for those unforeseeable accidents that occur whilst at home; for example, accidently spill your coffee over the laptop? No worries. Managed to put the broom handle through your plaster? Yeah, we’ve seen these – covered. TV falls off the wall? Covered. Toddler paints the carpet with mums nail-polish? Eeek! Covered. Washed your rather expensive mobile device with your jeans? Covered.

And like the Insured Events level of cover, there are some great additional benefits built in, along with nice high sub-limits for things like your personal valuables (e.g. $10,000 per item) so that you’re not having to list lots of valuables under this limit, keeping your premium reasonable.

Choice, choice, choice

We work with a number of major and some smaller insurers in the Australian home insurance market. We quote your requirements with all of them and negotiate on premium and conditions to find you the most appropriate cover for your needs.

Don’t box yourself in with a policy that puts you in such a tight corner, that you can’t use it when you need to. Let us do the leg work and present you with some options – we can then talk you through covers and you can make an informed decision. Easy!

 

*Policies are IBNA badged wordings