Category Archives: Personal Insurance
Posted on 18 May, 2018
In last month’s Part 1. Of our Home & contents insurance trips and traps series, we took aim at a few different types of cover, including accidental damage and holiday-home cover, and where to look for some standard industry trappings, laying out what some insurers may include in the fine print of a contract, and as well some areas where you may get tripped-up if you’re not diligently reading your insurance agreements.
This month, we take a look at the finer details of what insurance companies define as ‘Flood Cover’, terms and definitions to look out for and the variety of cover options for you to choose from. As well, we investigate the nature of home-business and home-sharing cover, and what It can mean for your personal liability and contents safety.
Traditionally, if Flood cover was not covered by a Home & Contents policy, it was the insurer’s legal obligation to clearly inform a policyholder of that fact – otherwise, cover was deemed to be effective.
As a majority of people are not exposed to a Flood risk it was unfair to charge everyone a levy to cover those who opted to build or buy a property in a flood-prone area, so Flood cover was not readily available from insurers.
However, with the regular traumatic flood damage to properties in far north Queensland the Federal government decided that Flood cover should be more accessible from insurers and urged insurers to provide the cover. However, without extensive mitigation of flood risk areas by local councils, it is impossible for insurers to provide cover at a reasonable cost in high exposure areas.
So instead of insurers providing automatic cover for Flood, we now have a mix of cover options for policyholders to be aware of as follows:
- The insurer provides automatic cover and spreads the cost of providing the cover over their whole portfolio of policies – cover cannot be deleted if the price is too high;
- The insurer provides cover with the option for the policyholder to opt out of the cover if the price is too high so it is clear they have made that decision in the event of a claim;
- The cover is optional and often very expensive in high-risk areas – policyholder has to make a decision at the commencement of the cover;
- The cover is not available at any cost which is highlighted in the policy.
So what does Flood mean in terms of an insurance policy jargon?
Generally, a flood is defined as the escape of water from any type of formal waterway such as a river, creek, reservoir, channel or dam as examples.
The Flood definition does not exclude water overflowing from a gutter, leaking from a pipe or tank or water run-off if it has not escaped from a waterway, as examples which are covered as a standard insured event.
So historically, it was an insurer’s responsibility to clearly inform a policyholder if Flood cover was not included. However, it is now almost a “buyer be aware” situation about Flood cover for a policyholder buying cover if they are not careful and be aware of the different policy covers offered.
One high profile insurer excludes any Business activity from a home. However, most insurers provide some limited coverage for such contents as office plant and equipment, stock and trade tools at the premises only.
The problem is that there is no cover for the business against its possible legal liability for injury or property damage to customers visiting the premises or others away from the premises. Also, there is no cover for the business’s legal liability in respect of any goods sold or manufactured. The reason for this is that it is difficult to underwrite the legal liability risk for the variety of business types that can be undertaken at home whereas contents cover is not so difficult to underwrite.
The result is that business owners need to have a separate Public / Products liability policy to cover their legal liability which many small home businesses would not understand.
The good news is that in the next few months a new Business Package policy will be available which includes all the required covers including legal liability and business interruption loss of income and extra expenses for many types of non-hazardous business.
If you have a spare room at home and are following a worldwide trend like Airbnb rentals to earn some extra money from short-term tenants, you need to be aware that all home policies have a legal liability exclusion for most business activities causing injury or property damage (as mentioned above).
Also, most policies will not cover tenant caused damage to your home or contents when letting out to others. Some insurers will insist you buy a Landlord policy which fixes some problems but creates others resulting in less cover than the normal home type of policy. Some others will insist you buy a Business package policy to get full coverage. And some insurers have a specific policy tailored for bed and breakfast businesses.
One good solution is to buy a separate Tenants’ risks policy which just covers the gaps mentioned above in a conventional home policy which occur as result of having rent-paying tenants in your home. This solution then does not prejudice the cover of your home policy like having a Landlord policy instead.
If you would like more information about any of the above articles, Donnellys would welcome your enquiry on (08) 8236 7789.
Note: This information is provided as general advice only to readers as a guide to Australian insurance policies. You should not rely solely on this information for your own situation and need to read the policy and PDS for any insurance that you are considering buying to ensure it suits your circumstances.
Posted on 02 May, 2018
If you’ve ever been caught out by the fine print in your home and contents insurance policy conditions, you’ll know all too well how important it is to make a careful and informed decision when choosing the policy that’s right for you.
In the first instalment of ‘Home and Contents Insurance “Fine Print” Tricks and Traps’, we take you through some of the more common fine print items that you should be wary of.
All policies contain a clause that reduces insurance coverage to ‘basics’ after a specified period of time if the house is left “uninhabited”. What this means is that if you are way from the premises for an extended period you may not be covered for certain events unless someone lives in the house for a minimum stay(s) while you are away; or unless you obtain approval in writing from your insurance company and pay an extra premium and / or carry a higher excess for claims.
Accidental Damage vs Defined Events Coverage
Defined Events cover means that you are only insured for the events listed in the policy document, subject to policy conditions, limitations and exclusions. For example, the only purely accidental damage event covered is breakage of glass. Otherwise, the event must be due to another listed cause, such as water leakage etc.
An Accidental Damage type of policy works the other way – it covers all accidental events claims unless it’s specifically excluded in the policy, so the coverage is more comprehensive. Another advantage (under many insurers’ policies) is the automatic cover for contents temporarily moved away from the home, which requires extra cover extension under a Defined Events policy.
Holiday House Cover
A holiday house that is let to short or long term renters should be insured under a Landlords policy. This is because a standard Home policy does not cover renter caused event claims, while a Landlord policy is designed to cover the different risks associated with renting a property out.
If your holiday house is leased out for short terms, instead of yearly contracts, you will need to advise your insurer as not all insurers accept short term rentals cover due to the higher risk involved for damage to the premises.
If you don’t let out your holiday house as it’s kept solely for the enjoyment of you and your family, you need to make sure that you know what the maximum period of time allowed in your policy is if it is uninhabited for long periods. Otherwise, the cover may be reduced. It’s not sufficient to have a neighbour check up on the property from time to time when it is vacant.
When choosing your home and contents insurance policy, it’s important that you ask the right questions, and make sure your policy is actually covering your specific needs. This is where the team at Donnellys Insurance Brokers come in. We’ll gather all of the relevant information from you so we can recommend options for you to choose the policy that best suits your needs, without you having to do the legwork yourself. Contact us today!
Note: This information is provided as a general advice guide only to Australian insurance purchasers. You should always read the Product Disclosure Statement cover summary and the detailed Policy document wording for full coverage details for any insurance that you are considering to ensure it meets your needs.
Posted on 02 April, 2018
In the final instalment of our ‘Car Insurance Tips and Traps’ series, we’re going to take a look at the fine print exclusions that could apply to your car insurance policy. We’ll also look at what happens when you use your car as an Uber vehicle, or if you need a rental vehicle after an accident.
Rental Car Cover After an Accident
Most Comprehensive Car insurance policies will cover you for the cost of hiring a substitute car for up to 14 days usually if yours is stolen but not if you are involved in an At Fault accident while your car is being repaired.
You may be able to find a repairer which can provide you with a loan car but you need to check your position regarding your liability for damage to the loaned car.
For convenience to attend to your normal routines using your car, it is best to arrange optional cover with many insurers for a rental car while your car is off the road.
Uber-Style Use of Your Car
A standard Comprehensive Car insurance policy allows you to share your car use with passengers providing it is not for reward. Therefore Uber-style use of your vehicle charging passengers for transporting them will technically invalidate your policy. Some insurers have reacted to this new society sharing economy development for Car insurance by providing cover for this activity but limited to a nominated maximum number of hours use per week for this purpose.
If this affects you, it is best to check with your insurer whether they provide this extra cover and what are the limitations of cover. However, don’t assume you have the cover without notifying your insurer in writing to gain their acceptance of this activity as you are responsible to inform them of any risk change to your previously disclosed circumstances.
Fine Print Exclusions
It is good to read the cover features of a policy but equally important is the need to be aware of cover exclusions or features missing when comparing policies so you know if you have the right policy for your circumstances.
Check the table below, which compares certain features of prominent direct insurers’, policies to see why you need a broker to find the right policy for you.
The above coverage comparisons were compiled by Donnellys from the Product Disclosure Statements (PDS) / Policy Documents viewed on the individual insurance providers’ website as at January 2017. This information is provided as General Advice only and a Guide to the right policy for you. You should check the full details of coverage, cover limitations and exclusions before making a buying decision.
Posted on 05 March, 2018
In part one of our Car Insurance Tips and Traps series, we looked at total loss claims, new for old car replacement and loan interest gaps. This month, we’re delving into everything from passenger liability for injury to car insurance claim penalties.
Passenger Liability for Injury
In many comprehensive car insurance policies, injury to others caused by a passenger opening a car door when unsafe to do so is not covered. But, Compulsory Third Party Liability (CTP) insurance for injury caused in an accident also excludes this risk in some states. So, it’s best to check whether you have this cover, so you can protect your passengers in the event of this type of accident.
Loan Car Cover
What happens if you are loaned a car by a repairer while your car is being fixed or when your car is being serviced and you have an at-fault accident in that car? Your comprehensive car policy will cover your liability for damage as a substitute car if yours is not being used at the same time, but not damage to the loaned vehicle.
You will need to sign a document when taking delivery of the loan car which probably makes you responsible for accident damage either for the owner’s policy excess payable for a claim or maybe even the full damage cost or their loss of no claim bonus.
So, it’s best to read any loan car agreement to check your damage responsibility and whether you have this cover in your comprehensive car policy in the event of this type of accident.
Car Insurance Claim Penalties
Having a car accident and dealing with the stress that comes with it is bad enough, especially when you have to arrange repairs and pay your claim excess. When you receive your renewal notice and your premium has skyrocketed due to your at fault accident penalty, it almost feels like too much to handle.
Most policies don’t penalise your renewal premium in the following circumstances:
- Your car is damaged while parked and you can identify the person at fault;
- Whilst travelling your car is hit from behind by another driver’s car and you can identify the driver.
This is because your insurer can recover your damage costs in these instances from the person at fault, including your excess payable for your claim.
Most other types of accident involve some fault by the parties involved. Many insurance policies will apply an excess to your claim and penalise your renewal premium if you are at fault. So it’s best to have a policy that clearly defines what degree of fault will penalise you in an accident, e.g. greater than 50 per cent fault.
The best way to avoid a hefty increase in your renewal premium in the event of an at-fault accident like a collision is to buy a Protected No Claim Bonus policy option, which is available from many insurers but it would pay you to check if you have this extra cover now or not.
Donnelly Insurance Brokers can look after you in all the above-mentioned circumstances to ensure you get the right cover at the right premium for the best value coverage and assist you with claims for better insurance. Contact us today for more information!
Posted on 05 February, 2018
Ever wondered what you should look out for when purchasing a car insurance policy, or when making a claim? Check out the first part of our three-part series on common car insurance tips and traps.
Total Loss Claims
When you insure your car comprehensively, there are two options to consider when looking at what claim settlement you will receive in the event of total loss damage or theft, namely:
– Market Value or Agreed Value Claims.
Market Value policies cover the cash purchase price of a car of the same age, type, model and condition in your local area but excluding other costs. In determining the market value, the internet, newspapers and dealer guides may be used for reference purposes. Sometimes a car can depreciate in value more rapidly than usual due to lower popularity, resulting in the claimant’s disappointment with their settlement. The problem with market value policies is the uncertainty about the claim payout value.
Agreed value policies cover you for a fixed amount for which your car is insured for each period of insurance, regardless of any price change for your car during that period, guaranteeing your settlement payout. It includes the value of insured accessories and equipment. Agreed value is a better option because of its claim payout certainty but it often costs a little more in premium. Some insurers cover Agreed value automatically in their policy coverage.
New for Old Car Replacement
All Comprehensive car insurance policies these days cover the cost of replacing your car with an equivalent brand new one if it is a total loss, provided the car has not travelled more than a specified number of kilometres in the guarantee period. The replacement guarantee period varies from one to a maximum of four years, depending upon the insurers’ policy coverage conditions.
Clearly, this is an important consideration when choosing a policy if you have a recent model to insure because this benefit offers you a new for old cover instead of a depreciated total loss settlement.
Loan Interest Gap
If you arrange finance for the purchase of your car, the interest payable is calculated on the initial amount borrowed on a fixed repayment for the term of the loan. Sometimes there is more money owed to the financier for the outstanding loan amount than is claimable from the insurer; in the event of a Total loss of the car due to its rapid value depreciation.
To view policy comparisons for high profile insurance companies of the above-mentioned policy benefits, check out our guide to the insurance market!
*This is General Advice only – you should read and understand the Product Disclosure Statements and Policies for insurers that you are considering for the purchase of insurance to ensure it is right for you.
Posted on 16 December, 2016
‘tis the season to be jolly…so make sure your home is safe, secure and you are adequately covered over the festive season by following Donnellys Christmas season top tips!
Travelling Overseas with Christmas presents
It is vital to ensure you are aware of the limitations within your travel insurance policy, particularly if you are taking presents abroad. Most insurers will cover presents under your personal baggage cover, providing the item you are claiming for falls within the policy limits/guidelines. Many policies have restrictions so it is very important to read your policy documents before you travel with gifts to ensure you are adequately covered.
Cover Yourself While Travelling
8% of Australians travelled without Travel Insurance on their last overseas trip, according to a survey commissioned by the Australian Government and the ICA 2016. That’s 850,000 visits by Australians overseas without Insurance! Do not expose yourself to such risks and get yourself covered.
Leaving Your Home Unattended Over the Holidays
Most policies would cover an unoccupied home for at least 30 days without the need to notify the insurer – but normal precautions would need to be taken as there is a duty of care on the policy holder to safeguard the premises. For example, if you have a security system, it must be activated when a home is vacant for a period of time, otherwise the policy cover may be prejudiced if contents are stolen when the alarm is inactive. If you have a bicycle you need to be aware that many policies have a limit on the value you can claim if it is stolen at home. And there may be no cover under a standard home policy if the bicycle is stolen and damaged in an accident or in competition away from home, unless you pay extra for a policy extension.
You’re out and about at Christmas parties and events, not forgetting all that shopping that needs doing. If your home is left empty during the festive season, it could be an easy target for burglars. Making sure your home is extra secure should be on your priority list. Ensure the exterior of your home is well-lit. Making sure your windows and doors are secure is essential all year round, not just during the festive season. Ask your neighbours and friends to keep an eye on your property and arrange for mail and newspapers to be collected while you’re away. Try not to share photos on Social Media while you’re away, wait until you return.
Out of Sight, Out of Mind
The best way to keep presents already bought for Christmas is to keep them out of sight. The safest option is to keep them hidden away until closer to Christmas. Also, be sure to properly dispose of any packaging for new items in the house. You don’t want to advertise your valuables to any potential thieves. So break it down and bag it up, don’t just leave it for collection.
Avoid a Christmas Inferno
Make sure you turn off your Christmas lights, when you’re out of the house, and when you go to bed. Avoid overloading plug points as this can be a fire risk and remember Christmas trees and decorations can catch fire easily.
The New Year is a Good Time to Update Your Home and Contents Insurance
If you are planning a quiet summer break at home, this may be a good time to catch up on important things like checking you are fully covered by your home insurance policy. The best way is to use the ‘Valuation Guides’ for home and contents replacement costs, which are found on leading insurer or broker websites. You need to know the size of your house and under-cover areas, half the value of fences, landscaping and paths. Once the festive season is over, it is important you update your policy with the valuable gifts you receive. Take an inventory of all non-fixed contents items, and take photographs of major items to be able to prove ownership in the event of a claim, should the worst happen.
Posted on 18 May, 2018
In last month’s Part 1. Of our Home & contents insurance trips and traps series, we took aim at...Read on
Posted on 02 May, 2018
If you’ve ever been caught out by the fine print in your home and contents insurance policy conditions, you’ll...Read on
Posted on 02 April, 2018
In the final instalment of our ‘Car Insurance Tips and Traps’ series, we’re going to take a look at...Read on
Posted on 05 March, 2018
In part one of our Car Insurance Tips and Traps series, we looked at total loss claims, new for...Read on
Posted on 05 February, 2018
Ever wondered what you should look out for when purchasing a car insurance policy, or when making a claim?...Read on
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