Home and Contents Insurance “Fine Print” Tricks and Traps (Part One)
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.
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