Owner Builders need to be aware that in the coming summer season, they have an Owner Builder Construction & Public Liability policy in place to protect them in the event of a flood, storm or cyclone.
The information below should be read and action taken to ensure your home, renovation, extension is covered.
If you are in QLD make sure you have cover and we are here to help protect you & your family.
Get adequate insurance for natural disasters
There have been many serious floods, fires, cyclones and storms in Australia over the last decade and many people have found out too late that they did not have enough insurance cover on their home and contents. This can be extremely costly and stressful, if you lose your home.
Wherever you live, your home and contents insurance cover should be enough to cover the cost of rebuilding your home and replacing your contents.
It is estimated that 13% of homes that required reconstruction or significant repair after the 2009 Victorian bushfires were not insured. See the Royal Commission’s report on the Victorian bushfiresand ASIC’s reports on Getting home insurance right: A report on home building underinsurance and Making home insurance better.
Increasing your insurance cover may not cost very much, and if you shop around you may even be able to get more cover for a lower price. See more on the risk of underinsurance.
Find out if you live in a disaster-prone area
To find out if you are in a natural disaster-prone area, you can contact your:
state emergency service or local fire services authority.
You can ask them about flood mapping and the Bushfire Attack Level (BAL) of your home to get a better understanding of your risk of flood and bushfires.
You can also ask your council whether your house has been built to natural disaster standards (e.g. cyclone standard).
Have you prepared for the bushfire season? This video from the Know Risk website provides some tips on how to keep your home and family safe during the summer months.
Check if your insurance covers you for natural disasters
If you live in an area prone to natural disasters, adequate home and contents insurance is essential.
Your insurance policy will state what disasters you are covered for. Review your policy carefully. Some people have found out after a natural disaster that the event was not covered by their policy and they have had to pay repair or replacement costs themselves.
Flood cover is not included in all home and contents insurance policies, so if you require flood cover, check whether your policy provides it and confirm exactly how much cover is offered. Even where flood cover is offered, loss or damage to some parts of your property may not be covered (for example, retaining walls, gravel driveways, pontoons, jetties or bridges) so check your policy carefully.
Check exclusions for storms, cyclones, floods and bushfires
If you have home and contents insurance, check whether you are covered for natural disasters such as storms, cyclones, floods, bushfires and flash floods. Make sure you understand what is covered, and any exclusions and conditions that apply. You can ask your insurer questions if you are unsure.
If you are not happy with your current level of cover, talk to your insurer about what they can offer. You can also speak to other insurers to see if you can find a policy that’s better suited to your needs. Always ask potential insurers lots of questions.
Check if you have enough insurance cover to rebuild
If you don’t have the right amount of cover to rebuild your home after an event, you are underinsured.
Consider a total replacement policy
If you choose a total replacement policy, you are less likely to be underinsured. With this type of policy, the insurer can agree to repair or rebuild the home to the same size and standard as the current home.
Consider a sum-insured policy with a ‘safety net’
Some sum-insured policies provide a ‘safety net’ on top of the amount you are insured for. This means if the costs to repair, rebuild or replace your home and contents are more than the sum-insured amount, you may be entitled to extra cover up to the limit of the safety net.
Make sure you read the terms and conditions that apply to this type of policy carefully as cover can differ.
Some insurers have calculators on their websites that may help you work out the sum-insured amount for your home and contents. We suggest you use at least three calculators from different insurers to compare sum-insured policies because the results can differ.
Case study: Johnny has a sum-insured policy with a ‘safety net’
Mature Asian ManJohnny’s home was insured for $500,000 when it was destroyed by a storm. Because of high building costs, it will cost Johnny $600,000 to rebuild, which is more than the sum-insured on his policy.
Johnny’s policy provides a safety net of up to 25% of the sum-insured, so rebuild costs of up to $625,000 will be covered. Johnny is relieved that the building costs will be covered by his insurance.
Home insurance advice for North Queensland residents
The Australian Government has a website to help North Queensland residents compare home insurance policies. The North Queensland home insurance website lists policy features and indicative premiums based on your suburb or postcode.
What to do after a natural disaster
If your home has been damaged in a bushfire, storm, flood or cyclone, here are some things you can do:
Contact your insurer – Lodge a claim with your insurer before you start any major repairs. Ask them to explain their claims process and talk to them about emergency or alternative accommodation if required. Don’t worry if your insurance documents have been lost or damaged, as insurance companies keep electronic records. If possible, check with your insurer before starting any clean up.
Do not do anything unless it is safe to do so – There may be dangers on your property created by the loss or damage to your home or contents (e.g. asbestos on your property, unsafe electrical wiring etc.)
Start cleaning up – Once it’s safe to go into your property, consider removing damaged possessions like carpet and soft furnishings. Before cleaning up, take photos and make a list of everything that has been damaged to assist your claim, including the serial numbers of electronics.
Check with your insurer before authorising repairs – You may not be covered for unauthorised repairs or if you hire tradesmen without checking with your insurer first.
Be careful with damaged equipment – Do not use items that may be damaged, like electronic equipment.
For more information, the Understand Insurance website provides some useful tips on preparing for natural disasters, including checklists and emergency contacts.
If you’re having problems with your insurance claim, see how to complain.
Financial hardship after a natural disaster
If you are experiencing financial hardship after a natural disaster, there are options available to you.
Help from your insurer
If you have trouble paying your excess, contact your insurer. They may let you pay the excess in instalments or deduct it from any payout you receive.
If you are in urgent financial need, your insurer may be able to fast-track your claim or give you an advance payment within 5 business days. Any advance payment will be deducted from the total claim.
Help from a financial counsellor
There are free financial counselling services you can contact for help if you are struggling with money following a disaster. We also have information on what to do if you need urgent money help.
Australia is a great place to live but it is also a harsh environment. Taking some time to do your insurance homework will help ensure maximum protection for your home.