Property 101: Home and Contents Insurance - glossary of terms

Understanding the intricacies of home and contents insurance policies can be complex, according to Canstar.

Below are a few of the more common home and contents-related terms that you'll need to understand – although keep in mind that policy wording can vary from insurer to insurer.

As such this is just a very general guide to some common terms. Please make sure that you carefully read the terms and conditions of any specific policy you are considering, to understand the inclusions and exclusions of that particular policy.

Accidental glass breakage

The accidental breakage of glass contents or glass forming part of contents. Glass contents may include such things as light fittings, glass in furniture and mirrors. It does not usually mean glass in televisions or small glass items such as crystal and ornaments.

Antiques, memorabilia

Given the sometimes-valuable nature of these items, you may find that the item is subject to a maximum dollar claim limit, or if the item cannot be replaced or repaired under the new for old specifications, your insurer may pay you what it would have cost to buy the item immediately before the loss or damage occurred, although your insurer will not pay more than the sum insured for that item.

Building replacement value

The amount it would cost you to totally rebuild your home at today?s prices, including any home improvements you have made.

Certificate of Insurance

The Certificate of Insurance is given to you by your insurer for each period of insurance. It is an important document as it shows the cover you have chosen and other policy details. It is used to verify the existence of that insurance.

Contents

Contents means your unfixed household goods and valuables and personal effects that you own including. It can include some items you may not automatically think of, including:

• carpets – fixed and unfixed, internal blinds and curtains
• furniture and furnishings
• electrical appliances such as TVs, stereos, computers, washing machines, dryers, refrigerators, freezers, portable heaters, plug-in lamps
• wheelchairs and medical equipment
• household tools and gardening equipment including ride-on mowers
• firearms legally registered and stored
• plants in pots
• portable and above-ground swimming pools and spas in a temporary site and their accessories
• surfboards, sailboards, canoes, kayaks and non-motorised surf skis

Contents – unit

If you insure contents in a unit, contents can include fixtures and fittings in the unit which are not legally part of the unit building for insurance purposes such as light fittings, wall paint, wall paper, wall coverings, floor coverings, eg floating floors, lino etc, a heater or airconditioning unit that you own.

Make sure your contents sum insured includes these fittings.

Duty of disclosure

You have a Duty of Disclosure to be honest and to tell your insurer everything you know or should know that a reasonable person would consider to be relevant to the insurer?s decision to insure anyone under the policy, including you, and on what terms.

The information you tell them can affect:

• the amount of your premium
• if your insurer will insure you
• if special conditions will apply to your policy.

If you are unsure, it is better to tell your insurer. If you do not tell your insurer something which may be relevant, it could result in a claim being reduced or refused or cancellation of your policy.

Excess

The excess is the amount you have to pay for each incident if you make a claim. It is generally deducted from the amount of cover provided by your policy. The amount and type of excess that applies to your policy is shown on your Certificate of Insurance.

Family

Family is generally defined as people who normally live with you and are:

• your spouse or partner
• your children or step-children
• your parents, grandparents, brothers or sisters
• domestic staff
• another person who resides with you  – but excludes any person who pays a financial consideration for doing so

Flood cover

The standard definition of flood is:

• the covering of normally dry land by water that has escaped or been released from the normal confines of:
• any lake, or any river, creek or other natural watercourse, whether or not altered or modified; or
• any Reservoir, canal, or dam.
• This is quite separate from damage caused by the sea. If you have concerns in this area, check with your insurer.

Forced entry

Unlawful entry into your home, including entry by using stolen keys or picking locks. It does not mean opening an unlocked door or window.

Fusion

The actual burning out of an electric motor or its wiring caused by the electric current in it. Therefore the item you are claiming on must have a motor for the claim to be successful. Common items that may be subject to a fusion claim include washing machines, refrigerators, clothes dryers, freezers and pool motors.

Home

Home means your residential building and its domestic fixtures and domestic structural improvements, at the insured address, including:

• garages and other domestic outbuildings
• pergolas, patios, verandas, decking and fixed gazebos
• wallpaper, paint and coverings on walls or ceilings
• fixed floor coverings including linoleum (glued down or not), timber floor coverings but not carpets (whether secured to the floor or not) or floor rugs
• insulation for roofs or walls
• electrical and gas appliances, light fittings and alarm systems but only if these appliances are permanently connected or plumbed to the electricity or gas supply
• dishwashers that are housed in a purpose-built cupboard or bench
• swimming pools and spas in a permanent site and their accessories
• barbecues (fixed in place)
• clothes lines (fixed in place)
• external blinds, fixed shade sails (fixed in place)
• awnings and fixed shade umbrellas (fixed in place)
• aerials, fixed satellite dishes (fixed in place) and
• masts (fixed in place)
• garden borders, driveways, paths and paving
• walls, gates and up to 2 kilometres of fencing
• service pipes and cables that you own or are legally responsible for
• tennis courts
• boat jetties and pontoons
• unfixed home building materials and uninstalled home fittings.

New for old

A provision that if your home or contents are damaged or stolen, your insurer will replace them with new items or repair them with new materials that are available at the time of replacement or repair from Australian suppliers.

Optional cover

This is extra insurance cover above that already included in the standard policy. You can ask your insurer to add one or more optional covers to your policy for an extra premium. An example may be accidental glass breakage, or storm damage to gates and fences. You can discuss with your insurer of choice the optional covers that may be available.

Period of insurance

The time you are covered by the insurance, as shown on your Certificate of Insurance.

Policy

Your insurance contract. It consists of this PDS, your application for insurance and your latest Certificate of Insurance.

Premium

The amount you pay your insurer for insurance. You also pay stamp duty, GST and any additional government charges, and Fire Services Levy (FSL) if applicable.

Product Disclosure Statement (PDS)

PDS is the name of the document that contains the terms of your insurance cover. It includes information that would have previously been available in the insurance policy booklet. It tells you what cover is provided, details of costs, fees and charges and other important information. It should be read together with your Certificate of Insurance. If there are any changes to your PDS, your insurer should provide you with a Supplementary PDS, or a new PDS.

Sum Insured

The most you can claim for any particular incident. The amount is shown on the Certificate of Insurance or in the PDS. The sum insured includes GST.

Tools of trade

Tools or equipment used for any business activity except for home office equipment.

Unit

A home unit, flat, villa or townhouse subdivided according to state or territory strata or unit title laws, or similar laws.

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