When looking at home and contents insurance policies in Australia, you might often come across a couple of terms: defined events and accidental damage. We break down the jargon to explain the difference.
What are defined events?
Broadly speaking, defined events (also known as listed events or insured events) are a range of situations and events which cause damage to your home and contents that you’re insured for. All other ‘events’ are typically excluded from cover.
Defined events may vary between the different types of insurance; for example, a home insurance policy might provide cover for broken window glass since windows are part of the home building’s structure, while contents insurance can cover damage to your furniture as these are your possessions. The list of defined events may then differ again across levels of cover and insurance providers.
Defined events can also refer to natural disasters, like a cyclone, bushfire or flood; these can sometimes be referred to as declared events.
Some common defined events in home and contents insurance include:
- Storm damage (like lightning, wind and rainwater damage)
- Theft or attempted theft
- Natural disasters (like cyclones or earthquakes)
- Escape of liquid
- Malicious damage
- Damage caused during a robbery
- Vandalism, riots or civil commotion.
The full details of your coverage for defined or listed events will be outlined in your Product Disclosure Statement (PDS) and will include the events covered, the monetary limits, exclusions and how to lodge a claim.
What is accidental damage?
Accidental damage cover is usually an optional extra that can cover you for accidental loss or damage that happens at home, like spilling a liquid all over your carpeted floors or personal items. Essentially, this is cover for other events that are not listed as a defined event. You may find that some providers include this cover automatically in their top-level home and contents insurance. It’s important to read the PDS to understand what’s included as part of this cover.
Are there times when defined events aren’t covered?
Generally, losses resulting from defined events that occur before you took out a home and contents insurance policy aren’t covered. Insurance is not designed to cover you after the fact but can help insure you against future events as detailed in your policy.
Some policies also have an exclusion period, during which time you won’t be covered if you claim for some of the listed events in your policy. These periods are generally 48 or 72 hours after you’ve first purchased cover. This can happen, for example, if you take out home insurance as a bushfire is approaching your town – you’ll be unable to claim the damage from the fire if it occurred within the timeframe listed in the policy.
Also, it’s likely that your defined events policy will contain other exclusions, which you’ll find listed in your PDS. For example, you may not be covered if defective workmanship damages your house during renovations.
If you’re unsure about whether your type of policy covers you for a particular event, give your insurance company a call or review your PDS, which contains the details of your coverage.