Insurance do’s and don’ts: Check your policy to see you have the cover you need.
You are overseas on a three-month trip of a lifetime and a freak storm wreaks havoc on your home. You didn’t tell your insurer of your travel plans and now you may not be covered for the damage.
You’ve left your work tablet in the back of a cab and the boss says it’s your responsibility to replace it. Will your insurance pay up?
These are just some of the potential scenarios that could cost you thousands or even hundreds of thousands of dollars because you didn’t read the fine print on your general insurance policy.
Failing to understand what you are covered for can have catastrophic consequences for your hip pocket, says Abigail Koch, spokeswoman for comparethemarket.com.au.
"Insurance is not cheap so you really do need to know what you are paying for," she says.
Reading your policy Product Disclosure Statement will take hours of your life you’ll never get back, but it could spare you financial disaster.
If you are away for more than 60 days and you have a break-in or fall foul of a natural disaster, you could run into trouble with your insurer, says Koch.
"You could face a hefty 'unoccupancy excess' when you go to make a claim or find you’re no longer covered," she says.
"For long absences you must let your provider know and make special arrangements to maintain your insurance."
Australian Bureau of Statistics (ABS) figures show 228,900 homes (2.6% of all households) were broken into in 2013/14 with most burglaries happening on a Friday, between 12 and 5pm, according to the NRMA.
GIO spokesman, Stephen Bell, also warns against sharing your holiday plans online as opportunistic thieves often use social media to target victims.
When you are away, you should always recruit a friend or neighbour to keep an eye on your place and collect the mail, cut the lawn and keep up general maintenance so the house doesn’t look unoccupied and to minimise any fire or storm damage risk.
Putting off odd jobs
"In the event of a fire you could have a claim questioned if you have let the maintenance of your home go for a while," says Koch.
Most people know to keep gutters and roofs clear but general upkeep is important.
"Some policies may require you to keep the home/unit and contents well maintained and in good condition. If you don’t meet your responsibilities, they may reduce or refuse to pay your claim or cancel your policy."
Damage from renovation projects can be costly.
Totalling tools of the trade
"If you have a work laptop or phone that you take home, make sure you know what you’re up for if it is stolen or damaged while in your hands," she says.
"You need to check your contents insurance policy and your employment contract whether your employer’s insurance will cover those work items."
Otherwise you could be forking out thousands of your own hard-earned dollars.
If you are renovating then a call to your insurer should be on your checklist.
Some insurance policies specify renovations costing more than $50,000 could affect your legal liability cover — the cover you have in case someone claims compensation against you for injury on your property.
Renovating? Check your liability.
"Claims can run into the hundreds of thousands if someone is injured, or worse, on your property," she says.
"Tell your insurer about a renovation project and increase the value of your home so you are not left in serious debt."
If you decide to splash out on a pool or spa then check your existing policy document. These items may not be included and need separate insurance.
Doing business at home
Most standard homeowner insurance policies do not provide cover for home-based businesses, says Koch.
"Double check if your existing home and contents insurance covers your business activities or employees, suppliers or customers in the event of accident or illness."
Aussies love the outdoors and a boat or caravan on the block is common but be aware of the potential hazards.
'If they’re timber, these items cannot only add to your fire risk but each of them could need separate insurance because they’re often expensive items not covered by a general policy."
Garden furniture, statues and even your gnome collection can be covered for fire damage or theft under most home policies but plants are another matter.
"If your prized Japanese maple or stunning rose garden are pilfered or destroyed by fire they will not be covered by the majority of insurers," says Koch.
"Some premium policies will offer cover but typically only up to a maximum of $2000 — not much when you consider how expensive plants can be."
If you sell products which you store at home, you need to protect your stock or inventory for damage or loss.
"Make sure your insurer can arrange alternative accommodation in the event of fire ... if you’re running a business from home, this could save you money in the long run," she says.
Don’t let the bugs bite
Termites cause around $1.3 billion in repair costs to Aussie homes each year but insurance companies will not cover against pest infestations — handy to know if you just bought your first house.
"Pests cause more damage to homes than natural disaster, theft and burglaries combined and insurance companies do not cover pests," says Koch.
"Prevention treatment is the only way to deal with them."