How to read a home insurance policy
A home policy is usually forty pages. You do not need to read forty pages. You need to read five things, and this is where they are.
1. The schedule
The schedule is the two-page summary at the front with your name on it. It states the buildings sum insured, the contents sum insured, the excesses and any endorsements. If a number on the schedule is wrong, the rest of the policy does not matter, so check it the day it arrives.
2. What counts as buildings and what counts as contents
Fitted kitchens, bathrooms and built-in wardrobes are buildings. Carpets, curtains and freestanding furniture are contents. Most disputes we see after a burst pipe come from people assuming the split goes the other way. The definitions section settles it.
3. Escape of water and accidental damage
Escape of water (a leak from a pipe or appliance) is the most common home claim. Check the excess for it specifically, because many insurers set it higher than the standard excess. Accidental damage is often an optional extra; if you have children, a dog or a wooden floor, it is worth having.
4. Single item limits
Contents cover has a limit per item, often $1,500 to $2,500. Anything worth more, such as a ring, a bike or a camera, has to be listed on the schedule by name. If it is not listed, the payout stops at the limit.
5. Conditions
The conditions are the things you agree to do: keep the locks in good order, tell the insurer about building work, do not leave the house empty for more than thirty days. Break one and the insurer can decline the claim.
If any of those five raise a question, that is what your broker is for. Send us the schedule and we will go through it with you.
