Why not all Home and Contents Insurance policies are equal

Different insurers have different policies about what’s included and what’s excluded in a Home and Contents Insurance policy. Here are three classic examples to look out for:

1) Flood cover

Living in a country like Australia with extremes in weather, you might assume all insurers automatically cover you for floods, but that’s not the case.

Some insurers don’t include flood cover in their base cover, but may allow you to add it to your cover for an additional premium. If you don’t pay the additional premium, you may not be covered at all if your home is damaged by floods.

2) Electrical motor burnout

Like flood cover, some insurers include electrical motor burnout in their base cover, but other insurers don’t. If you don’t tick that box, you may not be covered for the cost of replacing expensive appliances.

3) New for old replacement

When it comes to replacing lost or damaged contents, a big variable among Home and Contents Insurance policies is how much money you’ll be given to replace your items.

If your insurer offers new for old replacement, you’ll be paid enough to replace your old lounge with a similar new version – even if your lounge was 10 years old. But other insurers may only cover you for the market value of your old lounge, which may be considerably lower than the replacement cost.

Comparing apples with apples

Next time you’re taking out or renewing your Home and Contents Insurance, it’s worth looking at your quote or policy in detail to see what is and isn’t covered. Less expensive policies may have fewer inclusions and more extra-cost options, so you need to make sure you’re not comparing on price alone.

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Important Information

This article has been prepared by IMB Bank and contains general information only. It is not intended to be relied on as advice. It does not take into account your objectives, financial situation or needs. You should seek your own legal,  financial, taxation or other professional advice before you make any decisions about your business. Consider the relevant Terms and Conditions or Product Disclosure Statement and Target Market Determination available here before deciding whether to acquire any products or services offered by IMB Bank. Lending criteria, terms and conditions, fees and charges apply to IMB loan products.

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