Need to know
- Read your policy's Product Disclosure Statement (PDS) so you know what you're covered for
- Submit necessary proof of purchase documents and photo evidence to avoid delays
- Regularly review your policy to ensure you're covered for the right amount – and have agreed to an affordable excess
Home and contents insurance provides homeowners with financial peace of mind should the unthinkable happen – a destructive storm, an unexpected flood, a devastating house fire or burglary.
"All home insurance policies cover you for the same dozen or so commonly insured events, like fire, flood, theft and impact damage," CHOICE home insurance expert Daniel Graham says.
If such an event does befall your home, making a claim can add another level of stress to an already tense situation. Policies can be complex and confusing, and the claiming process isn't always smooth sailing.
To help make it easier, we asked Daniel for his best tips on lodging claims and how to make them as stress-free as possible.
You must immediately ensure that your property is safe and secure – this may involve calling 000, the SES, or an emergency tradesperson. Your insurer can arrange the latter – it's called a 'make safe' and should be no cost to you, even if you don't end up making a claim.
"Your policy usually requires you to prevent further damage, like turning off affected utilities, if it's safe to do so," Daniel says.
Don't throw out anything that's been damaged without first letting your insurer take a look
When the immediate risk has been dealt with, you'll need to contact your insurer, who will organise someone to assess the damage and organise repairs. "Insurers can refuse to cover any repairs they haven't authorised, unless it's to prevent further damage, so do not organise the full repairs before speaking to your insurer."
The next step is to document any damage and take photos. "Don't throw out anything that's been damaged without first letting your insurer take a look," Daniel says.
Before making a claim, check your insurance policy's Product Disclosure Statement (PDS) to determine whether your situation is covered; insurance policies vary and exclusions are common so always read the fine print on your Certificate of Insurance.
How you make your insurance claim depends on your circumstances, as well as your insurer and their claims process. "Best practice is for an insurer to have a 24/7 phone line so they can organise someone to come to your property and make it safe, even if it's the middle of the night," Daniel says.
"Many insurers also let you start a claim online, and in most cases there's a web dashboard where you can keep track of your claim's progress."
It's also important that you keep a record of all interactions you have with your insurer. "Always take notes of any conversations you have, on the phone and definitely in person," Daniel says. "It's not necessary to record phone calls but if you're dead set on doing so, make sure you get the other person's permission beforehand."
Depending on the circumstances of your claim, you'll need to provide your insurer with evidence of damage or loss and ownership. This evidence might include receipts or bank statements with purchase details, product warranties, photographs of the damaged or missing items and potentially declarations from witnesses.
Photos are a good starting point, and receipts are even better
How much evidence you'll need to supply will depend on the situation and the claim's value. "Insurers will want you to demonstrate your ownership and the value of any damaged property," Daniel says.
"Photos are a good starting point, and receipts are even better. Save copies of them digitally using a cloud storage service. If it's a theft or vandalism claim they will also need a police report number."
Your responsibilities during the claims process will be outlined in your PDS. "These usually boil down to: cooperate with the insurer, don't replace or repair anything without their permission, don't admit responsibility or liability. In short, let the insurer handle it – it's what you pay them for," Daniel says.
You can expect your insurer to act relatively quickly, in accordance with the industry's general insurance code of conduct. "Under this code, insurers have 10 business days to accept or deny your claim, or to ask for further information," says Daniel.
"But if you can show you're in urgent financial need, the code says they need to fast-track your claim or make an advance payment to tide you over."
In most instances, an assessor will visit your property to examine the loss or damage outlined in your claim and may interview you, your neighbours and witnesses, where necessary.
If you can show you're in urgent financial need, the code says they need to fast-track your claim or make an advance payment.
If the claim involves damage to your property, a tradesperson may also visit to assess the extent and recommended repair work for the insurer.
Mistakes happen, especially during stressful times. However, it's essential that you rectify any mistakes as soon as possible. Honesty is always the best policy when it comes to insurance claims; the omission of important details may be perceived by the insurer as misleading and result in the rejection of your claim.
"Be up front if you make a mistake. You have what's called a "duty of disclosure", which means you have to tell the insurer anything that might affect your cover. Call the insurer and let them decide whether the information is relevant," Daniel suggests.
Your policy’s Product Disclosure Statement will detail what you’re covered for.
If your insurance claim is rejected, you can dispute the finding. Before contacting your insurer, re-read your PDS to understand the insurer's contractual obligations and the insurer's complaint process.
"Generally, you'll start with the insurer's internal complaints process, and if that doesn't lead to a satisfactory result you can always complain to the Australian Financial Complaints Authority (AFCA)," Daniel says.
AFCA's dispute resolution service is free to access, and its decisions are binding on the insurer. You can lodge your insurance dispute online at afca.org.au.
Most insurance policies offer a reduced premium rate when you agree to pay an 'excess' when making a claim. "Most people take a policy with an excess, meaning you'll pay the first few hundred dollars toward the cost of the claim, so if the cost of the damage is less than your excess amount, it's not worth your money to claim," Daniel explains.
"Paying the excess is usually the next step after the claim has been accepted. The insurer will tell you to pay it either to them, or straight to the repairer."
If the cost of the damage is less than your excess amount, it's not worth your money to claim.
If you can't afford the excess on your policy, you can apply to the insurer for financial hardship assistance. "The insurer is required to work with you to come to a suitable arrangement, which might involve payment in instalments, an extension of the due date, or a reduced excess," he says.
Daniel says another consideration is how a claim may affect your insurance premiums on renewal. "Most insurers take your claim history into account when assessing your risk, so if you make a claim this year it's likely you'll see a premium hike next year," he says.
"If a tradie damages your home then their public liability insurance will likely cover it. In that case you should obtain their insurer's details and pass those along to your own insurer," Daniel says.
When embarking on a renovation or repair, it's your responsibility to ensure your chosen tradesperson has the appropriate licenses and insurances. Public liability insurance will cover mistakes or accidents that may occur onsite and pay out for damage, replacement or repair. Without it, you may be left to foot the bill or pay legal fees to recover the money.
In fact, if you've knowingly contracted a tradesperson that doesn't have this vital insurance, you – the person who hired the tradie – as the property owner could be held liable.
Stock images: Getty, unless otherwise stated.