Does your home insurance really protect you?

Fact Checked
Updated 15/06/2023
Does your home insurance really protect you?

A calculator and a home insurance PDS helps add up whether your home insurance is really protecting you

Time to read : 5 Minutes

Does Your Home Insurance Really Protect You?

Taking out home insurance offers some financial protection, but the type of cover – as well as the level of cover – you need can vary, depending on the type of property you’re keen to insure and its location. But does your home insurance really protect you? With many insurance providers more wary of fire and flood issues in certain regions across the country, the cover you think you have may not protect you against everything.

Three main types of home insurance:

  • building insurance: covers the building itself and the fixtures

  • contents insurance: covers personal belongings

  • home and contents insurance: covers the building itself and fixtures as well as personal belongings.

If you own your home, a combined home and contents insurance policy may be ideal. If you have a home loan, having building insurance may also be a condition of your mortgage.

Property investors may also want additional landlord insurance.

For renters, contents insurance helps protect your belongings from damage or theft.

Types of home insurance policies

Sum-insured cover

If your home is completely destroyed, sum-insured cover is where you provide an estimate of how much it would cost you to rebuild.

Total replacement cover

Total replacement cover insures you for the total cost of rebuilding or repairing your home to the same standard. A limited number of insurance providers offer this cover in Australia, and it is more expensive.

Do you know what your home insurance covers?

Does home insurance cover public liability?

Public liability insurance gives you financial protection related to injury to another person, or property damage, where you’re at fault. Think guests tripping down your stairs.

Check the inclusions of your insurance, because many policies do offer some coverage. But if you’re a landlord with tenants, it can become a more complex legal situation and it’s worth looking at your landlord insurance policy to see exactly what your insurance covers.

Are fences covered by home insurance?

Damaged fences are typically covered within building insurance – but the fencing needs to be well maintained to avoid your claim being declined.

Check to see if there are limits to size and length of fencing covered. Note that for any fences shared by a neighbour, your insurance will cover only 50% of the repair or replacement costs. The other 50%? That’s up to your neighbour and their insurance.

Does home insurance cover plumbing repairs?

Don’t expect natural wear and tear over time, such as rusty pipes or shoddy fixtures, to be covered by your home insurance. If investment in regular maintenance could have prevented the damage, insurance companies typically won’t pay. Home insurance is designed to protect from unexpected damage or loss.                                                                                                                         

Is a leaking roof covered by home insurance?

If the leak is caused by failing to do regular maintenance (such as cleaning gutters), your leaky roof may not be covered. But, if damage from a storm leads to your leaking problem, you should be covered for roof repairs, as well as ceiling damage caused by water seeping in.

Is mould covered by home insurance?

In humid coastal areas of Australia, rising damp can be a big problem – and a serious health risk. But does your home insurance cover the cost of mould remediation to remove it?

In most cases, the answer is ‘no’.

Because mould growth is a gradual process caused by other underlying issues (such as lack of ventilation or a leaking shower), finding an insurance provider who protects you against this may be challenging.

Does home insurance cover tree removal?

Damage from a tree falling on your property during a storm is something insurance should cover (as long as the tree was not dead or rotten and should have already been removed). If you’re voluntarily removing a tree because you want to freshen up your landscaping, you won’t be covered. Insurance providers are in the business or risk mitigation, not garden beautification, after all.

Are foundation problems covered by home insurance?

If the damage to your home’s foundation is caused by an insured event (fire, flood or storm), then the answer is, generally ‘yes’.

Natural shifting/settling of foundations is not covered and tree root damage is usually excluded too. This is because they are gradual problems that are preventable – not unexpected events.

Does home insurance cover include termite damage?

In the eyes of insurance providers, termites come under the banner of things that are preventable.

Does home insurance cover working from home?

Generally speaking, home and contents insurance does cover working from home. But that may not be the case if you are running a registered business from home. Always check the Product Disclosure Statement (PDS) so you understand your coverage. 

Does home insurance cover landscaping and plants?

A comprehensive contents insurance policy can cover plants – but check with your insurer and be sure to shop around if you don’t get the answer that suits your circumstances.

Are solar panels covered by home insurance?

Generally, yes. A good comprehensive policy should include solar panels as part of your building.

Does home insurance cover hot water systems?

Not for gradual wear and tear or maintenance-related negligence. But if the hot water service is damaged in an insurable event (fire, flood or storm), then your hot water system may be covered. Ask your insurer, and if they can’t offer you the cover you need, consider shopping around.

Go deeper: Choosing home insurance

Financial disclaimer

The information contained on this web page is of general nature only and has been prepared without taking into consideration your objectives, needs and financial situation. You should check with a financial professional before making any decisions. Any opinions expressed within an article are those of the author and do not specifically reflect the views of Compare Club Australia Pty Ltd.