What does homeowner's insurance cover?

Home insurance covers the cost of repairing your property if it is damaged or destroyed in an insurable event. These events could include natural disasters such as storms or fires, unfortunate circumstances such as falling trees, or criminal activity such as break-ins or vandalism.  

Home insurance often also includes liability cover, which can help you pay compensation to someone who is accidentally injured while on your property.

Some home insurance policies may offer extra cover at an additional premium, such as accidental damage, flood insurance, motor burnout insurance, and contents insurance. 

What type of home insurance do I need?

There are two types of house insurance policies: total replacement cover and sum insured cover. The former covers the total cost of rebuilding the house to the same standard before it was damaged. The latter home insurance type covers the cost of damages up to a predetermined limit, which is called the sum insured.

The best choice for you and your household may depend on your financial situation. Total replacement cover can provide valuable peace of mind, though the premiums can be more expensive. You may be able to shrink the cost of your sum-insured home insurance premiums further by reducing the sum being insured, though this could risk finding yourself underinsured when you really need it.

Does homeowner’s insurance cover electrical problems?

Your household could face many kinds of electrical problems, but unfortunately your home insurance policy may not cover all of them. Damage accidentally caused by natural accidents may be covered, as might the repair of motors if you have opted for fusion damage cover. For example, if there’s a lightning storm and your home suffers a power surge which causes a short circuit, any repairs needed may be covered if your homeowner’s insurance contains lightning damage.

However, if any electrical appliances break down or stop working, even a home and contents insurance policy may not always cover the cost of repairing the appliance. You should check with your insurer about making any electrical repairs inside your home as that may affect your coverage. Some insurers may require an inspection of the appliance to authorise a repair.

Usually, in Australia, you need to hire a professional electrician to carry out any inspections or repairs to the electrical system in your home. This can include conducting periodic checks to make sure the electrical wirings are not exposed to seepage, flooding, or attacks by rodents. Consider asking your insurance provider about optional coverage for fixed electrical appliances such as air-conditioners.

Does homeowner’s insurance cover blown-down fences?

Most insurers consider fences a permanent fixture on your property. They are ranked alongside your home, garages or sheds, swimming pools, and solar panels when it comes to your home insurance policy. Your policy, therefore, covers your fences for the same incidents that cover your home or other parts of your property.

For example, if there’s a major storm in your area and fences get blown down, you can get your insurer to pay for the cost of repairing the fence. You can check your insurer’s Product Disclosure Statement (PDS) to confirm that your policy covers the incident before filing a claim. Also, if the fence that has been damaged or blown down divides your property from your neighbour’s, you both may file a shared fence damage claim with your respective insurers.

There may be situations when your home insurance policy doesn’t cover damage to the fences on your property. For example, if you were working on or near the fence and caused some sort of damage to it, you may not be able to claim compensation. Wear and tear on a wooden fence from waterlogging could also be considered negligence on your part, which could lead to an insurer denying your claim.

Does homeowner’s insurance cover structural damage?

Some common causes of structural damage to a property include foundation issues (such as settling or ground shifting), hidden structural damage (such as that caused by termites), or weather-related damage (like by a tornado or hurricane).

Most insurance providers don’t cover gradual structural damage in home insurance policies, as these policies are intended to offer protection from loss due to sudden, unexpected events, such as fire, burglary or weather-related damage. It can take months or even years for you to discover most foundational or structural damage to your property, and by that time, it can be rather costly to repair.

Since it takes a long time to detect, most structural damage is considered a maintenance issue and therefore, your home insurance policy won’t cover it. However, all is not lost. Once you locate the damage and take the necessary steps to not only repair it but also prevent further harm, your insurance policy might cover any subsequent loss if an insurable event occurs.

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