Learn more about fire insurance

Fire damage is typically included in most home insurance policies around Australia. If your home catches fire by accident and is damaged or destroyed, your insurance policy should cover the cost of repairing or rebuilding the property.

Your home insurance should cover you against accidental fires such as electrical faults, kitchen accidents, and the like, as well as bushfires. But keep in mind that there may be exceptions or exclusions in your home insurance policy, so be sure to carefully read the Product Disclosure Statement (PDS) before you commit.

If you have a combined home and contents insurance policy, or a separate contents-only insurance policy, then the insurer should be able to pay for repairing or replacing the possessions in your home if they are lost or damaged in a fire. Depending on the policy, this could include new for old replacements, so you can continue to enjoy a similar standard of living to before disaster struck.

Fire insurance isn’t a separate type of insurance policy, but is instead often automatically included in a typical home insurance policy. However, depending on your home’s fire risk, you could have to pay higher premiums for your insurance. Some areas of Australia may become “uninsurable” due to the high risk of bushfires and other natural disasters.

If you live in regional Australia, or anywhere with a high Bushfire Attack Level (BAL), your home may be at a higher risk of experiencing a bushfire. This could lead to insurers asking you to pay a higher premium for your home insurance, or to pay to add extra bushfire insurance to your policy.

Insurance policies for landlords typically offer building-only coverage, so events that can damage or destroy an investment property such as fires should be covered in most cases.

Landlord insurance policies may also cover damage caused by tenants, though damage caused by cigarette smoking may not be covered by all policies.

Tenants living in an investment property may need to take out their own contents insurance policy to help cover the risk of their belongings being lost or damaged in a fire.

Insurers often include specific definitions for each type of insured event that they cover as part of their home insurance policies. Damage from other sources may not always be covered, even if the source is related to an insured event. 

For example, if your insurance policy only covers damage from fire, it may only come into play if your home is consumed by flames. The policy may not cover other related damage, such as damage caused by ash or smoke. So, if a fire broke out in your kitchen, the insurer may be able to help repair the burned countertops and replace your ruined oven, but not to re-paint the smoke-stained ceiling. 

Similarly, ash and soot damage may not be covered under an insurance policy that only covers fire. Scorching and melting damage from extreme heat also may not be covered. Check the PDS before you apply, and find out if an option is available to pay extra for coverage against a wider range of damage types.

Remember that you likely won’t be covered against fire damage if you fail to comply with fire safety laws – you may be covered if you accidentally start a fire (provided you weren’t being reckless), but not if you deliberately set a blaze.

You also may not be covered if you neglect to protect your home from fires – check those smoke alarms!

Once the fire at your home has been extinguished and the authorities have confirmed that the structure is safe to enter, you can start the process of making a fire damage insurance claim. Take plenty of photos of the damage and try to make as accurate an assessment as possible of the level of damage to your home and/or its contents.

Contact the insurer by phone or online and provide your policy details. They may send a loss adjuster to assess the damage to the property and its contents and work out what may be covered and by how much. 

The insurer should then be able to walk you through the next steps. These could include setting you up in temporary accommodation if the fire damage is too extensive for the home to be liveable. 

If you have total replacement cover, the insurer should be able to pay for the full cost of repairing or rebuilding your home. You can get quotes from builders and other tradies and the insurer can cover the invoices as required – they may also be able to help put you in touch with skilled repairers. And if you have new for old contents insurance, damaged or destroyed goods in your home can be replaced like for like with similar new models, such as replacing your old freestanding cooker with a newer model in a similar style.

If you have a sum-insured home insurance policy the insurer will pay you a lump sum to cover the assessed cost of repairs or rebuilding your home. The amount the insurer will pay is based on the insurer’s assessment of the damage. This means that even if you over-insure your house for more than it’s worth, you may not be paid out the full amount on your policy even if the home is completely destroyed.

If you opted for a lower sum-insured amount, possibly to help keep your home insurance premiums more affordable, the cost of repairing or rebuilding your home could go over your policy’s maximum cap. You may need to bear the remainder of the repair or rebuilding costs yourself, which could put you out of pocket when you’re already doing it tough. With this in mind, some insurers offer a ‘safety net’ in their policy, which can add up to 30% extra to your sum-insured amount in the event of a total loss. Check the PDS to see if a safety net is available to you.