When you take out a home and contents policy, you’ll likely choose a comprehensive policy with added extras to safeguard your house and possessions against as many scenarios as possible. 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 tend to vary between insurance companies, some of the common exclusions are:
- Leaving your property uninhabited for an extended period. When it comes to home and contents insurance, there’s no written rule for how long you can leave your house unoccupied. So, if you’re travelling overseas for a large part of the year, telling your insurer in advance is well worth it. Otherwise, you might find that damages and theft aren’t covered.
- Not securing your home properly. If your home isn’t secure or you haven’t taken reasonable steps to secure it, you risk your insurer rejecting your claim.
- Home swapping or having someone stay at your place. Holiday houses or private rentals 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.
- Uninsured flood damage. If you live in a low-lying area or near a body of water, you need to take due precautions such as getting flood insurance. Otherwise, you could face the unfortunate prospect of paying for 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.
- Storm damage. As surprising as it may seem, not all insurers cover storm-related damage. For example, the cost of removing fallen trees from your property may not be included in your policy. However, you will be covered if a fallen tree causes damage to your home.
- Tree lopping. While home insurance policies do provide cover for falling trees or branches, they 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. Damage caused by defective handiwork also may not be covered.
- Acts of war, hostility or rebellion. Although acts of war haven’t been carried out on Australian soil since World War II, they are considered unavoidable circumstances (or ‘force majeure’). As such, your property will be exempt from cover. Claims made due to acts of terrorism and rebellion (e.g. riots) may also be excluded.
- Animal damage. This event is more likely to occur in the outback where pests like feral pigs can inflict damage on a property. However, your insurer may deny claims made for damages caused by your pets.
- General wear and tear. Damages caused by gradual deterioration or lack of maintenance. For example, if you have corroded water pipes that leak throughout your house, it wouldn’t be covered by home and contents insurance.
- Renovations. While your policy may have specific renovation-related clauses, most insurers won’t provide cover 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 cover through your builder’s insurers or through a separate policy entirely.
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 Product Disclosure Statement (PDS) your insurer provides you before purchasing a policy.