Australia’s climate is prone to heavy bushfire seasons, yet the number of homes without bush fire coverage rises every year, as well as the number of people who find themselves under-insured.
Insurance against bushfires
Even those with home and contents insurance may be surprised to find that their particular policy does not cover bushfires. Most standard home and contents policies have provisions for fire, but this does not always mean it covers bushfire damage.
When fire coverage is included in a policy it may only refer to fires that begin in the home, such as those beginning by accidental means or by electrical fault. You should not take for granted that you are automatically covered against bushfires if it is not specifically mentioned in the policy. Bushfire coverage is sometimes listed under the heading “natural disaster”.
Read your home and contents insurance policy thoroughly; you are not covered against bushfires if:
- Bushfire is in the list of exclusions
- You did not have bushfire coverage before a blaze. You cannot obtain it afterwards and you will not be covered. Some insurers instill exclusion zones in areas that are on fire so you cannot increase your coverage at that time
- Your policy has lapsed and you did not renew it
- You have made renovations or made new purchases but did not notify your insurer and add them to your list of insurable items. In this case you will have parts of the building and some contents that will not be covered.
The best way to avoid confusion is to ask your insurer if bushfires are covered in your policy.
Bushfire cover: policies, premiums and providers
Many insurers offer bushfire cover as an optional extra. If you live in a high fire danger area your premium will most likely increase to reflect the added risk. However, bushfire coverage should not increase the cost of your premium by much.
The Commonwealth Bank offers comprehensive home and contents insurance (including bush fire cover) for around $360* per year. This is the average cost of insuring a $160,000 home with $20,000 worth of contents in a low to medium risk area. Other providers include NRMA, GIO, Allianz and AAMI.
Your premium will be determined by a number of factors such as your post code, the age of your home, the safety precautions you have taken to protect your home and any previous claims you have made.
* Prices subject to change. Please contact the provider.