Insurance that covers your property in the event of a fire

If your home is in a potential bushfire zone, finding suitable insurance could help give you peace of mind if a fire-related incident occurs.
what is fire insurance?

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Australia’s hot, dry climate makes bushfires a real concern in all Australian states and territories. Victoria is one of the most fire-prone areas in the world, but extreme fire weather can occur anywhere in Australia.

Risks of buying a house in a bushfire prone area

The Australian bush is known for its bushfires, but fire-prone areas come in many shapes and sizes, including:

  • Coastal scrub;
  • Rural grasslands and paddocks;
  • Dense or open bush;
  • Grassland and town borders; and
  • Bushland and town borders.

Some residential areas may be prone and even if there’s no dense bush near your home, you could still be in a potential fire zone. Each state and territory maps fire-prone areas, so you can check an area before deciding to buy a house there.

Protecting your Home and Contents in a bushfire prone area

If you do live in a fire zone, your home and its contents could be at risk of i fire damage. While you can’t avoid this completely, you can take steps to reduce the risk. Some of these steps include:

Buying insurance can help you reduce the significant financial impact of a fire.

Insurance for bushfires in Australia

In Australia, cover against bushfires may be included in Home and/or Contents insurance products depending on the policy. You can also take out cover for these products separately, but it’s more common to bundle them together into a Home and Contents Insurance package.

It’s good to remember that insurance that helps provide cover for bushfires doesn’t necessarily just cover you for bushfires – many providers offer products that also help provide cover for other natural disasters like floods and storms.

Home and Contents Insurance products can vary across insurers, so it’s vital to check exactly what you’re covered for before an incident occurs where you’d need to make a claim. To give you an idea:

  • Most insurers will cover bushfires but not all will cover floods or storms.
  • Exclusions and caps can vary between insurers.
  • Some insurers may have special terms and conditions.

How bushfire cover is structured

It’s typically covered in two different ways within Home Insurance policies:

  1. Total replacement cover: This helps cover costs for the total market value of your home to rebuild it to its original state.
  2. Sum-insured cover: This is a more common policy and helps provide cover for a nominates total amount to rebuild your home.

It’s important to ensure you’re not over or under-insured, especially if your policy offers sum-insured cover.

It’s also important to estimate rebuilding costs as accurately as possible to make sure you have Insured your building at the correct value through your insurer.

For example, if your bushfire cover is sum-insured, but your house isn’t insured for its correct value , then you won’t get the full value of your rebuild costs back if you need to make a claim. You’d only get the sum-insured value back.

Pros & cons of Home Insurance types

There are advantages and disadvantages to both total replacement cover and sum-insured cover.

Total replacement cover



Reduces the chance of your home being underinsured in case of a bushfire.

May still leave you out of pocket if building standards have changed in your area.

Your insurer will pay the total cost of rebuilding your home.

Funds to rebuild may take longer to receive because your insurer must do a full assessment first

It could be worthwhile if you’re unsure about the total cost of rebuilding your home.

If your home has restricted access after a bushfire, it could delay the funds even more.

Sum-insured cover



Funds are usually received quicker because the amount has already been agreed.

It could leave you underinsured if a bushfire occurs.

Some insurers offer a policy extension that can provide an increase on the sum insured in certain total loss scenarios.

You may need to review your policy regularly to make sure your insured amount is relevant to current prices.

It could be worthwhile if you know exactly how much it would cost to rebuild your home.

The risk of underinsurance is higher.

How much does bushfire cover cost?

Large-scale, devastating bushfires cost $77 million a year in Australia, according to the Australian Institute of Criminology. This does not include small bushfires, which can still be financially devastating to locals in the community.

For individual property owners, the costs of rebuilding can be significant, so it can pay to have a suitable policy in place.

With iSelect, you can compare a range of Home Insurance policies to see what your monthly and annual premiums could be, and select a suitable policy.

Some things to consider before deciding on Home Insurance with bushfire cover

Bushfire coverage can vary across providers, so think about these questions when you’re ready to compare Home Insurance policies:

  • Does the policy cover you specifically for bushfires?
  • Does it cover all bushfire-related damage, including where there was no flame?
  • Are other types of natural disasters covered under this policy?
  • In the event of a claim, what does the insurer need before cleanup begins?
  • Does the policy cover cleanup? What does this cover specifically include?
  • Does the insurer offer total replacement cover?
  • What is the price difference between total replacement cover and sum-insured cover?
  • Does the insurer offer a sum-insured policy extension?
  • Does your policy include emergency accommodation or other extras like demolition and debris removal?
  • If so, is this in addition to the sum-insured amount?

Answering these questions ahead of time may help you find a suitable policy.

How to make a claim after a bushfire

You should tell your insurer as soon as possible if your home is damaged in a bushfire. Giving them as much detail as possible and answering all questions as accurately as you can may help them process your claim quicker.

Even if you can’t access your home to assess the damage, you can still contact your insurer to get the claims process started.

Things to consider when making a claim

  • Insurers will typically assess the damage to your property during an onsite visit before any repairs are done.
  • They may also want to approve your repairer or builder.
  • You can start emergency repairs before your claim is processed but keep clear records of all damage and repairs (including photos, videos, receipts for work). It’s also important to read what you can or can’t repair before you speak to your insurer, as this may compromise your claim.
  • In order to be able to claim, the event must be one that is insured on your policy. It’s important to review the Product Disclosure Statement for information about policy coverage and limitiations
  • Wherever possible, let your insurer know what you plan to do before you do it.

Where can I find a Home and Contents Insurance policy?

Home Insurance covers various events and cover will depend on the specific wording in your policy. If your home is within a fire zone and you’re particularly concerned about bushfires, it’s vital to read policies carefully to see exactly what they cover.

Click here to view iSelect’s range of Home & Contents providers and policies.

Last Updated: 06/07/2022