Home Insurance Exclusions

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What are the different types of home insurance?

What are home insurance exclusions?

Why are some items excluded from coverage?

What are some common home insurance exclusions?

What optional extras could I get if I want cover for an excluded item?

How can I make sure my home insurance covers my needs?

Need to understand exclusions but time-poor? We’re here

Long story short

Exclusions are what’s not covered in your home insurance policy

From pests to wear and tear, insurers draw the line on certain items. It’s a good idea to check your policy to understand the exclusions.

Not everything in your home is automatically covered

High-value items like jewellery or business equipment often need extra coverage for protection.

Optional extras can expand your cover

Add-ons like flood cover or accidental damage cover can help fill the gap for extra peace of mind.

What are the different types of home insurance?

When you think of home insurance, you might think it’s just one simple product. But actually, it’s an umbrella term that can mean cover for your home, your stuff, or both. Whether you’re a homeowner, landlord, or renter, home insurance has your back if your house or belongings cop it from things like fire, theft, or natural disasters. 

Here’s the lowdown on the different types of home insurance.

Combined home and contents insurance

This one’s the all-in-one deal – it bundles building and contents insurance into a single policy. This type of home insurance is great if you want to protect your home’s structure and things inside it, like your couch, TV, or that fancy coffee machine. A combined home and contents insurance policy is a bit like having a safety net for your setup – walls, roof, and prized possessions. 

Building insurance

If your property gets damaged because something unexpected happens, like a storm or a fire, building insurance helps cover the cost of fixing or rebuilding it. Sometimes called ‘home insurance’ or ‘home building insurance’, it’s all about protecting the structure – walls, roof, sheds, and even built-in bits like shelves. Basically, this type of home insurance covers anything that wouldn’t fall out if you flipped your house upside down. 

Contents insurance

Got a coffee machine that you can’t live without? Or maybe a doona that’s seen you through thick and thin? Contents insurance has you sorted for your household stuff – from the sentimental to the everyday. This type of home insurance covers loss, theft, or damage, and you can even add extras like portable cover for things you take out and about, like your laptop or camera.  

Landlord insurance

This one’s for the property owners renting out their place. Landlord insurance is like building insurance or combined home and contents insurance, but with a landlord twist. It’s got the options for extra perks to cover things like tenant damage, missed rent, or even legal dramas if your tenants go rogue. This type of home insurance is an optional cover that can be a real lifesaver for landlords!

What are home insurance exclusions?

Insurers approve about 96% of claims, which is pretty solid. For the claims that get knocked back, one of the reasons is policy exclusions.¹Insurance Council of Australia – Q: What are some reasons that insurers may deny a claim?

Exclusions in home insurance are incidents, items, or circumstances that your policy won’t cover. You’ll usually find these spelled out in the product disclosure statement (PDS). They can sometimes feel like a roadblock when you’re navigating a claim, which is why it’s important to understand your policy and dive deep into your coverage at the outset. 

Why are some items excluded from coverage?

Even the fanciest, most comprehensive home insurance policy out there will have some exclusions. This is to keep costs in check – both for the insurer and for you.  

When you take out home insurance, you’re not buying a lucky charm that steers you clear from all the terrible stuff –you’re chipping in to share the financial load with thousands of other policyholders. Your premium is just a small slice of the total cost of managing that risk. 

Think about what it’d take to replace your home or everything you own. Compare that to your annual home insurance premium. It’s nowhere near the same – and it’s not meant to be. Even a small fire can rack up tens of thousands in costs. If your policy covered every pricey, common issue like mould, your premium would likely skyrocket. And let’s be real, most of us wouldn’t want that. 

So it makes sense why insurers add policy exclusions. 

Here’s why certain stuff doesn’t always make the cut:

Helpful tip

Keep a list of your home’s quirks – think pre-existing damage, repairs needed, or recent upgrades. It’s not just handy for you; sharing this with your insurer up-front can help avoid hiccups when it’s time to make a claim. Transparency now can save headaches later. 

Adrian Bennett

General Manager for General Insurance

What are some common home insurance exclusions?

While the nitty-gritty can differ between insurers, there are some common home insurance exclusions that are worth keeping in mind. 

Asbestos: If your home has asbestos-related issues, don’t expect your insurer to cover the cleanup.

Breaking the law: Claims related to illegal activities? Yeah, no dice.

Business activity: Running a business from home? Laptops, desks, and other equipment might not fall under your standard policy. Although note that if listed, some insurers will cover business activities at the home, usually at an extra premium.

Communicable diseases: Damage or loss caused by diseases spreading through your home is unfortunately on you.

Contamination or pollution: Whether it’s chemical, biological, or otherwise, contamination is usually excluded.

Intentional acts: Damage you or your bro cause on purpose? That’s also on you (or your bro). 

Loss of data, hacking, or cyber attacks: If someone hacks your smart home system, your insurer probably won’t foot the bill. And if your computer crashes and you lose important files, your policy won’t cover it. 

Repossession: If your home gets repossessed, your policy won’t cover any losses. 

Trees, shrubs, and plants: Damage to your garden or landscaping isn’t always included.  

Acts of war or terrorism: Hopefully not something you’ll need to worry about, ever. 

Pests: A termite invasion? Sorry, mate, that’s yours to sort. 

Now, don’t panic! Just because these things aren’t usually included doesn’t mean you’re completely out of luck. That’s where optional extras can come in.

What optional extras could I get if I want cover for an excluded item?

Insurers often offer top-ups to cover specific items or risks. Think of them as the side dishes on a menu – extras you can mix and match to suit your coverage cravings. Here are some extras that you might be able to choose.

Flood cover isn’t automatically included, but you can get it as an add-on – which might be especially appealing if you live in a flood-prone area. 

Accidental damage insurance covers those whoops moments, like red wine on a white lounge. 

Portable contents insurance is for pricey items that you like to take everywhere with you, like your jewellery, phone, or camera. 

Motor burnout cover is handy if your fridge or AC suddenly conks out. 

Taking the time to customise your policy with these extras could save you from a few sleepless nights and regretful out-of-pocket expenses down the track. 

How can I make sure my home insurance covers my needs?

When it comes to insurance, ‘set and forget’ can come back to bite you, especially if your situation changes. Here are some ways you can stay on top of your coverage. 

Understand your PDS

Your product disclosure statement (PDS) is your best mate. It tells you exactly what’s covered, what’s excluded, and where optional extras fit in. Sure, it’s not the most thrilling read. But you don’t need to memorise it, either. Just knowing where to find the relevant sections – like exclusions and optional covers – is a start. 

Be realistic about your needs

You’ll probably want to focus on the coverage that makes sense for your lifestyle. What’s valuable to you might not be the same as for your neighbour or your best mate. By understanding your policy’s exclusions and asking the right questions, you’re less likely to be caught out by the unexpected.

Ask your insurer questions

Not sure your policy is up to scratch? These questions are a good place to start: 

• What are the standard exclusions in my policy?
• Are there optional extras for [specific coverage you need]?
• Is accidental damage included, or do I need to add that?
• How does my policy cover valuables, and what are the claim limits?
• Am I covered for flood or storm damage in my area?

Need to understand exclusions but time-poor? We’re here

Understanding policy exclusions can save you from head-scratching moments later. It’s a good idea to grab your policy, assess where you stand, and reach out to your insurer if you spot gaps. Whether it’s adding extras for valuables or getting the green light for flood coverage, a little effort now can pay off big time when you need it most.  

And if you need to compare policies, we can give you a hand. The iSelect comparison tool can make comparing inclusions and exclusions quick and easy for you – all within a few clicks!