What Home Insurance Covers and What It Does Not Cover

Home insurance usually covers fire, flood and other natural calamities, burglary and similar risks, as per the policy. It does not cover wear and tear, and it does not pay for the market price of your land. Always read the covered events and exclusions before you buy.

Knowing what is in and what is out helps you avoid unpleasant surprises at claim time.

Two parts of home cover

Most plans have two parts. You can buy one or both.

• Building cover: Protects the structure, such as walls, roof and fixed parts
• Contents cover: Protects things inside the home, such as furniture, appliances and personal items

Tenants usually need only contents cover, since they do not own the building.

What is usually covered

The exact list differs by plan, so check your policy wording. Common covered events are:

• Fire: Damage caused by fire and related events
• Flood and storm: Natural calamities that damage the building or things inside
• Earthquake: Damage from earth shaking, as per the policy
• Burglary: Loss of household items when someone breaks in
• Other listed events: Similar risks named in the policy

Cover is only for the events written in the policy. If an event is not listed, the claim may not be paid.

What is usually not covered

Here are the most common exclusions:

• Wear and tear: Normal ageing, rust, damp or slow damage over time
• Land value: Building cover is based on rebuilding cost, not on the market price of the land
• Events not in the policy: Anything the plan does not list
• Careless or illegal acts: Losses linked to these are usually excluded
• Empty or unused homes: Some plans have rules about homes left empty for long periods
• Items above a limit: Costly items like jewellery may have a limit per item

Read the exclusions page slowly. It is the part many people skip.

Why rebuilding cost matters

A common confusion is that the cover should match the price of the property in the market. That price includes the land and the area value. But a policy for the building is usually based on how much it would cost to rebuild the structure.

If you choose a sum that is too low, the claim may be reduced. If it is too high, you may pay more premium than needed. Ask your advisor to help you work out a fair figure.

Contents cover: what to know

For contents, think about the things you would need to replace after a loss:

• Furniture and fittings
• Electronics and appliances
• Clothes and household goods
• Valuables, as per the plan's limits

Make a list with photos and bills. This helps you pick the right sum and makes a claim easier.

Common claim problems

Claims can face trouble in these cases:

1. Wrong or hidden facts at the time of buying
2. Cover that is too low for the real value
3. Events not covered by the policy
4. Missing proof such as photos, bills or a police report
5. Late information to the insurer
6. Policy not renewed on time

Being careful on these points can make a big difference. Our post on what is home insurance gives the basics.

Steps after a loss

1. Make sure everyone is safe.
2. Inform the insurer quickly.
3. For theft or burglary, inform the police and get a report.
4. Take photos of the damage before you clean up, if it is safe.
5. Keep bills and repair estimates.
6. Follow the insurer's steps for the survey and papers.

How home insurance fits with other cover

Home insurance protects your property. It does not replace health or life cover. If you also drive, see our car insurance page. For an overview of home plans, visit our home insurance page.

Read the policy once, slowly

Sit down with your policy and mark three things: the events that are covered, the exclusions and the claim steps. Make a note of any limits on single items and any rules about empty homes. If a line is not clear, ask your advisor to explain it in plain words before you buy. Ten quiet minutes with the policy can save a lot of stress later.

FAQs

Does home insurance cover theft?

It usually covers burglary of household items as per the policy. Check the conditions and limits.

Are jewellery and cash covered?

Plans often have limits or special rules for such items. Check your policy wording.

Will it pay for old damage that built up over time?

No. Wear and tear and slow damage are not covered.

Does it cover a rented home?

A tenant can usually insure contents. The building cover belongs to the owner.

Rules can change and differ by plan, so your policy document is always the final word. Insurance Kro can help you read it.

This guide is for information only. Rules and policy terms can change, and the policy document is final. Please read your policy wording.