Home & Contents Insurance

You can either take out a new contents policy or arrange to have your existing policy transferred to your new address. If you are moving to a smaller home and disposing of some of your possessions, consider whether the level of cover should be reduced accordingly.

You generally only need to take out your own home insurance policy if you directly own a non-strata title freehold property. In most retirement villages you will not therefore need your own policy, the main exception being a community title village where your home is on a separate community title. In lease, license, strata title, company title and unit trust villages, the village owner or the relevant owners corporation, company or trustee will usually be responsible for insuring the village structures, including your home.

If any of your current insurance policies become redundant when you move, terminate them and apply for a pro-rata refund of the premiums you paid. Home building and contents policies, like all other types of insurance, are legally binding contracts.

Insurers undertake every effort to simplify the language in these contracts, within the boundaries set by legislative requirements such as the Insurance Contracts Act, the Financial Services Reform Act and the Federal Privacy Act.

Insurance companies, agents and brokers can also assist policyholders with understanding their insurance and to answer questions raised at the time of policy purchase and renewal.

When buying or renewing insurance policies, take the time to ensure that the policy you are buying provides adequate cover for your needs. Also make sure to recalculate your level of insurance at the time of policy renewal to avoid being under or over insured when the time comes to make a claim.

Under the Financial Services Reform Act, insurers provide a 15-day cooling off period to purchasers of insurance. This provides policyholders with enough time to thoroughly read their insurance policy and decide whether it is the right policy for their needs.

What Can I Do to Minimise my Risk of Under-Insurance?

Under-insurance is a serious problem in Australia, with many people not realising they are under-insured until a significant loss occurs. Many policyholders gamble with their property for the sake of saving a few premium dollars. In most cases, doubling the amount insured will not necessarily double the insurance premium.

In the case of under-insurance, most companies will pay up to the sum that the policyholder has insured (eg if a $200,000 house has been insured for $100,000 the insurer will only pay $100,000 if the house is destroyed). A small number of policies may involve "averaging" or "co-insurance" clauses. (Check with your insurer for further details).