Insurance and bushfires
Have you got the right level of building and contents insurance cover? A survey conducted for the Insurance Council of Australia (ICA) suggests 83 per cent of households believe they may be underinsured.
Most household insurance policies include cover for bushfires. Australia has a highly competitive general insurance market, which means you can shop around and find an insurance policy that best suits your individual circumstances.
Insurance checklist for bushfires
The Insurance Council of Australia recommends that before each bushfire season you should:
- Make sure you have enough insurance cover to avoid severe financial loss if your home or contents are destroyed by bushfire.
- If you are concerned about the potential total loss of your property, speak to a reputable builder and get a quote for the cost of a complete rebuild. Once you have this, speak to your insurer and make sure your sum insured covers this cost.
- Reassess the value of your home and contents, vehicles and any outbuildings you have on your property, and the level of cover you need to financially protect them.
- Conduct a household contents inventory to make sure your belongings are adequately protected and ensure the cover matches the value of these belongings.
- Make sure you understand what cover you have, as well as any exclusions or limits that may be a part of your insurance policy. It is important to be aware of these exclusions and to query your insurer about any part of a policy you do not understand.
Insurance terms, exclusions and conditions to be aware of
The Insurance Council of Australia explains there are some insurance terms, exclusions and conditions to be aware of in household insurance policies. These include:
- embargoes or no coverage for a set time at the start of a policy
- no cover for loss or damage where no flame damage has occurred, such as scorching, melting, heat, smoke, ash or soot
- coverage for a burning building within a specified distance of your home
- loss mitigation clauses, such as taking all reasonable precautions: for the safety and protection of your building and the site; to prevent injury or damage to your building or property; and to ensure compliance with all statutory obligations, bylaws or regulations imposed by any public authority relating to the safety of persons or property.
Useful resources
Learn more from the Insurance Council of Australia:
- Preparing for bushfire season
- What to do in the event of a bushfire
- Building and Contents insurance calculators
- Insurance - Frequently asked questions for help in disasters?