Home insurance can be defined in simple terms as Defined Events or Accidental Damage coverage.
Defined Events covers certain events, such as fire, wind, water, storm, earthquake, cyclone, malicious and impact damage and burglary. Accidental Damage is a broader coverage providing coverage for any damage unless excluded, and thus, if it is not excluded, insurance cover is provided.
Home insurance is also subject to policy limits, meaning coverage is provided up to a certain dollar limit, in many areas.
Below is a standard type home insurance policy provided by Business Insurance Specialists Pty Ltd compared, in certain areas, to both Budget and Youi insurance’s best home insurance policy offerings (as at 1 January, 2016).
|COMPARE||CGU Insurance||Budget Insurance||Youi Insurance|
|BIS offers this policy||Yes||No||No|
|Type of Policy||Accidental Damage (Automatic)||Accidental Damage (Optional at cost)||Accidental Damage (Optional at cost) limited to $5,000 in year (pg 21)|
|Accidental Loss||Insured (Worldwide) - Automatic Coverage||Insured (at Home only) - Optional Coverage||Not Insured. Excludes loss resulting from theft at the premises unless locked and secured, and there are visible signs of forced entry (pg 11)|
|Damage from Power Surge||Insured||Insured, from Lightning only||Not Insured|
|Jewellery / Valuable Items||Insured – Automatic; $10,000 per item / 25% of contents sum insured per claim||Insured – Automatically up to $1,000 per item and $5,000 per claim||Not Insured unless requested (at additional costs)|
|Coverage for contents temporarily removed from Home||Insured – Automatic in AUS or NZ (no day restriction, and Worldwide up to 100 days. No restriction where contents kept.||Insured – Automatically in AUS up to 90 days. Cover restricted to motel, hospital and NO Coverage for Accidental Loss.||Not Insured unless requested (at additional cost)|
|Money||$1,500||$800 Defined Events||Not Insured|
|Tax Audit Costs||$5,000||Not Insured||Not Insured|
The above table is a summary, but as illustrated above the direct insurer policies from Budget or Youi, provide reduced coverage and benefits. In the event of a claim, this means you will be paid less, or worst case, not paid at all.
Clients who have paintings, works of art, highly valuable items, jewellery, carpet (undamaged but adjacent to damaged), identity fraud exposure etc. can find themselves severely disadvantaged in the event of a claim if they are not insured correctly by an appropriate home insurance policy. Direct policies from the like of Youi or Budget have limited or no coverage unfortunately in many areas of their polices that are important to prestige home owners.
We offer market leading prestige home insurance products at competitive cost.
If your house has a replacement value of greater than $ 1M, you should consider this coverage and review your home insurance with Business Insurance Specialists Pty Ltd.
If your home has valuable items, business contents, wine in a wine fridge, fine art, coverage for items away from home, a pontoon, carry luggage overseas etc, you are getting either nil or little coverage with direct home insurance policies.
The client has damaged carpets in a prestige home they had previously insured with another insurer - RACQ. They requested our advice.
Following a review of their policy, we noted some major differences. Refer below for a comparison review.
Following this review, they changed their home insurance from RACQ to Business Insurance Specialists (AIG) - the cost was a little more, however, they were covered for far more, which was more important to them
|COMPARE||RACQ||AIG||Which is Better?|
|Policy Type||Accidental Damage||Accidental Damage||N/A|
|Flood coverage||Included (pg 22)||Included (no exclusion)||Same|
|Covered for any contents in Asia/ Europe/ USA whilst travelling||Not Insured||Included (pg 6)||AIG|
|Stabilisation of land under House||Not Insured – Subsidence/ Earth Shrinkage/ Expansion/ Erosion exclusion (pg 62)||Insured – 10% of Building Sum Insured (pg 6)||AIG|
|Alternative Accommodation||10% of Home Sum Insured / Maximum of 12 months (pg 69)||Maximum of 4 Years (pg 23)||AIG|
|Contents insured||At home situation only (pg 19)||Worldwide (pg 6)||AIG|
|Items away from home||Optional coverage (pg 57)
$2,000 per item / $8,000 per claim. Maximum coverage allowed (pg 57)
Australia and NZ only (Pg 57)
|Automatic coverage (pg 6)
No major limits for away from home other than unspecified Jewellery $25,000 per item / $50,000 per claim (Pg 20)
Worldwide (pg 6)
|Replacement of personal documents (Marriage Certificates, Passports, Qualification certificates etc.)||$1,000 (pg 41)||$5,000 (pg 20)||AIG|
|Matching repairs to undamaged carpet||$ 500 max. (pg 41)||If carpet is all joined – no dollar restriction||AIG|
|Replacement Locks||Must be stolen. $1,000 max. (pg 40)||Lost or stolen. $5,000 limit. Advise within 72 hours (pg 24)||AIG|
|Food Spoilage||$1,000 (pg 37)||Up to full Contents sum insured.$10,000 for Wine (pg 21)||AIG|
|Removal of Debris||20% limit of Home Building Sum Insured. Additional Cover (pg 36)||Reasonable costs – unlimited. Additional to Home Building Sum Insured (pg 7)||AIG|
|Credit Card Misuse||$1,500 (pg 35)||$30,000 (pg 9)||AIG|
|Precious metals in the form of bars or bullion and precious or semi-precious uncut or loose gems.||Excluded i.e. not Insured by policy (pg 16)||Bullion $ 2,500 (pg 20). Precious uncut or loose metals – set and unset gems – $25,000 per item / $50,000 in total (pg 17)||AIG|
|Golf buggies or motorised wheelchairs that are or should be registered.||Excluded i.e. not Insured by policy (pg 16)||If not registered, automatically insured for damage to buggy, or damage or injury caused by buggy (pg 27)||AIG|
|Boat jetties, pontoons or wharves||Excluded i.e. not Insured by policy (pg 13)||Insured – Other Structure||AIG|
|Mobile Phones||Optional coverage only||Automatic||AIG|
|Small Business contents||Optional coverage only – $20,000||Automatic $30,000. Automatic $50,000 (Medical Practitioner) (pg 7)||AIG|
|Specified Items away from Home||Optional coverage only. Restricted to AUS and NZ only (pg 57)||Automatic cover for away from home worldwide (pg 6)||AIG|
|Identity Theft||Not Insured – not mentioned in the policy||$50,000 (pg 33)||AIG|
|Visitor Contents||$500. Exclusions e.g. Laptops. (pg 46)||Included – no dollar limit (pg 21)||AIG|
|How are claims settled – Is Cash Settlement the choice of the Insured or Insurer?||This is not your choice, but the choice of the Insurer (pg 67)||Silent, but agreement with insurer, that it is Insured’s choice||AIG|
|Tree Removal – threatening to fall, or fallen trees||Not Insured||$ 5,000 (pg 22)||AIG|