What home insurance doesn’t cover

A home and contents policy works to safeguard your house and possessions from the financial impact of several different scenarios. However, you should still know about a number of home and contents insurance exclusions and restrictions that can come into play when you buy your policy.

What are some common home and contents insurance exclusions?

Although they vary between insurance companies, some common exclusions are:

Leaving your property uninhabited for an extended period. When it comes to home and contents insurance, some insurance providers won’t cover the home if it’s unoccupied for more than 60 consecutive days, whereas others may have a 90-day or more time frame. The very definition of ‘unoccupied’ can also vary between insurance providers so it’s important to read your Product Disclosure Statement (PDS) before making a purchase. If your home will be unoccupied for a month or more, it’s best to tell your provider in advance; otherwise, you might find that theft, vandalism, malicious damage and other events are not covered.
Not securing your home properly. If your home isn’t secure or you haven’t taken reasonable steps to secure it from a break-in, you risk your provider rejecting your claim.
Home swapping or having someone stay at your place. Holiday houses or private rentals like Airbnb are great ways to generate additional income. However, any damage to your house caused by invited guests might not be covered by your home and contents policy (holiday letting platforms like Airbnb may provide some insurance cover for this).
Uninsured flood damage. If you live in a low-lying area or near a body of water, it’s a good idea to take out flood cover. This may come at an additional premium, as it’s often a type of optional cover not included as standard, though some providers do offer it as standard for certain areas). Otherwise, you could face the unfortunate prospect of paying for flood damages yourself.
Business activity. If you conduct any business activity from home, you’ll need to notify your home and contents provider to ensure that they can still cover you and accurately calculate your premiums.
Illegal activity. Any illegal act or activity which damages the home or contents kept at the insured address will not be covered by your insurance provider.
Lawful confiscation. If the police or other government body seize some of your belongings with the use of a search warrant, your home insurance won’t cover the cost of replacing them.
Storm damage clean-up. As surprising as it may seem, not all providers cover a storm-related clean-up. For example, the cost of removing fallen trees or debris in your yard from a storm may not be included in your policy. However, you will be covered for repair and rebuilding costs for storm damages that affect your home or contents.
Actions of the sea. Water damage caused by things like tsunamis and storm surges will likely be excluded from your cover.
Tree lopping. Many home insurance policies won’t cover damage from trees that are lopped or pruned whether it’s by you or a hired professional. Any damage caused by tree roots, plants, shrubs and hedges may also be excluded from home and contents policies.
Existing damage. If your house has pre-existing damage, which can range from mouldy ceilings and leaky roofs to serious structural defects, you usually can’t make a claim to fix it.
Acts of war, hostility or rebellion. These are considered unavoidable circumstances (or ‘force majeure’) and aren‘t generally covered by home or contents insurance. Likewise, other events involving civil commotion and armed conflict (such as riots) are typically excluded from cover.
Nuclear material and contamination. Most policies do not cover any damages to your home or possession caused by nuclear material or nuclear contamination.
Animal damage. Any animal from a small insect to a feral pig can potentially inflict damage on a property; however, damage from insects, rodents, vermin and other wild animals may not be covered by your policy.
Pet damage. While some insurance providers may cover damage from pets, many do not accept insurance claims caused by our furry friends.
Uninsured accidental damage. Many insurance providers don’t cover loss or damages from mishaps (e.g. someone bumps the television over) unless you’ve purchased accidental damage cover. Your minimum premiums may not include accidental breakage, but most providers offer this as an additional extra (and some do offer it as standard).
General wear and tear. Damages caused by a gradual deterioration, or a lack of maintenance aren’t insured. For example, if you have corroded water pipes that leak throughout your house, it wouldn’t be covered by home and contents insurance. Mould and rust are also typically excluded.
Renovations. While your policy may have specific renovation-related clauses, most providers won’t cover you if you’re renovating your house. If you can’t find a home insurance policy that covers your refurbishment, you might need to pay for coverage through your builder’s insurance or a separate policy entirely.
Defective workmanship. While your home and contents insurance policy may cover the cost of injuries to residents and visiting guests under legal liability, the cost of repairing and fixing any defective work is not.
Failure to disclose. Policyholders who know about issues with the home building or their contents but withhold that information may find they won’t be covered by their building insurance or contents insurance for related claims. Insurance providers will investigate and assess claims as part of the claims process, so it’s always best, to be honest.
Fraudulent claims. It should go without saying, that any deliberate act or intentional damage to your property done by yourself won’t be covered; this is insurance fraud and is a crime.
Events that occur during waiting periods or embargoes. When you first take out a home and contents insurance policy there may be embargoes or waiting periods where you cannot claim for certain insured events (also known as defined events). For example, you might not be covered for bushfires or floods for 72 hours from your policy’s commencement date.

When you compare home and contents insurance, you’ll find that all policies have limitations and exclusions in one form or another. This is why it’s crucial to read the relevant PDS and key fact sheets from your provider before purchasing a policy, so you can read the full details of what is and isn’t covered.

Family outside home

Frequently asked questions

Will I be covered if a natural disaster happens just before I purchase home insurance?

If you’re about to purchase a new policy and a bushfire, flood, cyclone or other disaster happens before you buy, any damages related to this event wouldn’t be covered. This is called a ‘known event’ or ‘named event’ and known events that occur before your policy begins aren’t covered even if they cause damage after the policy commences (such as a bushfire that burns for several days).

Furthermore, almost all home and contents insurance policies have an embargo or waiting period on certain defined events from the commencement date of your policy. Known events specified in your policy’s embargo (typically natural disasters) may not be covered until a set time after your policy first takes effect.

Are portable contents covered if I take them out of the house?

Insurers will typically offer two types of portable contents cover: unlisted (or unspecified) portable contents cover and listed (or specified) portable contents insurance cover. Many insurers include unlisted (or unspecified) cover as a standard inclusion on a home and contents policy up to a specified limit per item and/or group limit.

Unlisted (or unspecified) portable contents cover will provide coverage by way of a total sum insured for all items claimed over one event as opposed to itemising each belonging individually as you would for listed items.

Listed (or specified) cover will allow for certain items to be detailed to their full value or cost of repair or replacement. These will typically be reserved for high-ticketed or valuable items. This could be your expensive mountain bike, a laptop with valuable documents and work-related data and/or as you’re stepping out in your finest jewellery or dress watch, you will want to be covered should you damage them, or they are stolen from you. This additional cover would attract a higher premium.

What if the repair costs exceed the value listed in my policy?

If the cost to rebuild, repair or replace your home or the contents within it exceeds the sum insured on your policy (i.e., the specified monetary amount you’re covered for), you will likely have to pay any difference in costs out of your pocket. This situation is known as underinsurance.

To avoid underinsurance, it’s essential that you ensure the replacement value for your contents and the sum insured for your home’s structure would adequately cover the cost of completely rebuilding the home or replacing your contents. You may wish to update the sum insured regularly to ensure you’re never out of pocket. When setting your sum insured for the first time, you might find that free calculators online can help you determine a figure.

What if the cost of my claim exceeds the sum insured listed on my policy?

You should also take note of any sub-limits within your policy for certain categories of items; you may even have the option of increasing these contents sum limits for specific items, such as jewellery.

To safeguard the amount for which you have your home insured, some insurers may offer an optional extra sum insured safeguard otherwise known as an “underinsurance safety net” or “sum insured cover”. For most insurers this an optional extra to your home insurance policy whereby you are somewhat covered if in the event of underinsurance where the cost to rebuild your house exceeds the sum insured, leaving you to foot the difference.

With sum insured safeguard cover, for example, if you make a claim with your insurer and they determine that the cost to replace or repair the damage to your home exceeds your sum insured, they will increase your sum insured by a nominated percentage (usually up to 25% – 30%). Combine this cover with keeping your sum insured assessed for a more accurate amount consistent with quotes to rebuild your home, you should have peace of mind you will be looked after financially should anything happen to your home.

However, there are circumstances to rising costs for rebuilding that can be out of your control. Some trades will raise their rates following a major weather event due to the demand. This is hard to plan for. Some other insurance providers also offer “total replacement cover”, these policies agree to cover the cost to repair or rebuild rather than paying up to an agreed sum insured. This tends to be a more expensive option.

Are electrical motors in the house insured?

Appliances may be damaged by a power surge and burnout. This is covered by motor burnout cover, which is usually only available as an optional extra that you can add to your home insurance or contents insurance policy, depending on what you‘re looking to insure.

For example, a wall-mounted air-conditioner would be considered a fixture of the house and would be covered by home insurance, whereas a washing or drying machine that you bring with you into the home falls under contents insurance.

Stephen Zeller, General Manager

Insurance exclusions tips from our home and contents insurance expert, Stephen Zeller

Always reviews the PDS details before you buy a policy. When comparing home and contents insurance through Compare the Market, you can view the full PDS of any available policy before making a purchasing decision.
If there are any changes to the home or your living situation, it’s crucial you inform your insurance provider as soon as possible. This includes holidays, planned renovations or updating your sum insured amount.
Some providers may not cover thefts unless you’ve reported it to the police and have an incident report. In any case, make sure you report any crime to the police or relevant authorities and emergency services.
Several insurance providers may charge an additional excess for leaving your home unoccupied for a set period, which will be added to your standard excess if you make a claim for an insured event that occurs while nobody’s home.
Take photos of your belongings and store the images somewhere safe. If something like a fire or theft happens, this can help you compile a list of lost items and prove what you owned.

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Home and contents insurance exclusions