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How much insurance do you need for bushfire protection?
We all hope that bushfires will never approach our home, but not every Australian is lucky enough to be unaffected. Ensure your home has enough insurance coverage, including cover for bushfires, just in case.
Know your risk
Chances are, you’ll know your risk already. But if you’ve recently moved to a new area, check out how prone to bushfires it is. State governments and local fire authorities provide maps that can help you figure out whether your property is at risk:
- ACT: Emergency Services Agency
- NSW: Rural Fire Service
- NT: Northern Territory Government Department of Environment and Natural Resources
- QLD: Fire and Emergency Services
- SA: Government of South Australia
- VIC: County Fire Authority
- WA: Department of Fire & Emergency Services
Your home is where you and your family should feel safe… so it’s important to minimise hazards at home.
While you probably can’t guarantee a cyclone proof house or a flood proof house, there are a few things you can do to help reduce hazards at home.
Here are a few things that may help make your home more fireproof by reducing the risk of fire damage:
Always pay full attention when cooking.
Regularly inspect your chimney and electrical systems…
Always ensure you have working smoke alarms in the house.
To help reduce the risk of damage caused by bushfires to your home and family
Clean your gutters regularly, consider installing fire resistant gutter guards, cut back overhanging branches, and check your garden hose can reach your property boundaries
Remember to have a survival plan ready You can take measures to help prepare reduce the risks of flood damage
Clean gutters and downpipes regularly
Repair loose roof tiles or other damage to the roof
Have sand bags in case your area does flood
And DON’T Use electrical or gas appliances affected by floodwater, until they’ve been checked
Other household hazards include poisoning.
Carbon monoxide poisoning from fossil fuel burning appliances is another hazard.
Consider Installing a carbon monoxide detector.
Ingesting cleaning supplies or medications is another safety hazard. Keep chemicals and medications stayed safely away from children.
Water can be hazardous. Especially so for young children.
It only takes 20 seconds for a toddler to drown. Supervise young children around water at all times.
In Victoria, all swimming pools and spas capable of containing 30cm depth of water must have a compliant safety barrier. It’s important to be prepared for earthquakes.
Make sure to fasten tall furniture to walls
Store hazardous material safely away
And don’t store heavy objects on tall shelves or hang heavy items over beds or sofas.
This is by no means an exhaustive list.
Conduct your own research and conduct a risk assessment of your home.
And if you’re looking for cover for insured event like a fire or earthquake, you can find out more about AAMI’s combined Home and Contents Insurance.
Save $50 when you quote and buy online.
Head to aami.com.au for more info or find the link below! The information is intended to be of general nature only. We do not accept any legal responsibility for any loss incurred as a result of reliance upon it – please make your own enquiries.
Knowing how much it would cost to replace your home and contents helps you determine how much cover you need. If you’re unsure about the amount of cover you need or are concerned that the amount needed may change, you may wish to consider choosing an insurance policy that offers complete replacement cover rather than a policy where you need to choose a sum insured.
‘Complete replacement what?’ we hear you ask. Let’s break it down:
Home building insurance policies often have a set sum insured, which is agreed upon by you and your insurer. It’s the maximum amount your insurer will pay in the event of a claim. AAMI offers you the option of Complete Replacement Cover, which means you won't have a set sum insured limit for rebuilding your house. Once your claim is approved, we'll choose to repair, rebuild your house as it was, or pay you the amount of the assessed quote to repair or rebuild it. It means you won’t have to worry about setting a specific sum insured, and helps avoid the risk of being underinsured if, say, there’s a sudden spike in building costs after a large bushfire, storm, cyclone or earthquake.
What to consider when calculating your sum insured
If you’ve decided to set a sum insured, make sure you avoid underinsurance.
According to the Insurance Council of Australia, 10% of home insurance policy holders ‘understate the cost of replacing their home to lower their insurance premiums.’1 While a lower insurance premium may appeal when you take out a policy, you could wind up out of pocket if you ever need to make a claim.
There are free resources, like our snazzy online home contents calculator, that can help you estimate how much cover you need. Just know, the estimate is intended as a guide only, and it can be helpful to chat with an architect or builder for a more accurate idea of your potential rebuilding costs.
Home building insurance will only cover the structure of your house, so you might find it useful to cover your belongings as well with contents insurance. When thinking about a contents policy, it can be useful to record the details of your possessions. One way to do this is to create an inventory list of the contents in your home, which keeps track of them along with proof of ownership and value.
Knowing how much your things are worth can help you estimate your sum insured. And if you keep adding new items to your inventory, especially pricey ones like appliances and electronics, you can keep your sum insured updated accordingly and be more likely to have the right level of cover. Easy!
Updated building codes
Building codes are updated every now and then to ensure new homes are built to the latest safety standards. If they’ve been updated since your home was built, that may add to your building costs. The Insurance Council of Australia2 estimates that new bushfire building codes can add between $100,000-150,000 to your final cost.
The costs of rebuilding
When it comes to rebuilding, there are a few things that may impact costs:
- The style of the building and type of finishes you’ll be including.
- Where your property is located. If it’s tricky to reach or on a slope, your costs could increase.
- Whether you have additional structures or features on your property, like a garage or pool.
- Whether you’ll need to remove any debris or demolish parts of a damaged structure, or account for landscaping costs.
- Temporary accommodation while you rebuild.
Building a home from scratch has its fair share of fees. Council permits, and architect, builder or surveyor fees can add up. Check if your policy covers them or have a yarn with someone who knows their stuff to help make sure your cover and sum insured will account for the cost of rebuilding.
Get to know the terms and conditions
When you take out an insurance policy to cover your home, including bushfire coverage, it’s important to read the fine print. Here are a few things worth being aware of:
- AAMI Home Building Insurance does not cover bushfire, storm, storm surge, flood or tsunami for the first 72 hours of your policy. Very limited exceptions apply. Read the PDS for more detail. Though, you may be covered if your policy began on the same day you bought your home or if a previous policy on it expired (and only to the sum insured covered under the expired policy for the first 72 hours).
- Some policies may not cover certain types of damage or things at all, so it’s important you check that your insurance meets your needs.
- Loss or damage caused by fire (includes bushfire) and heat, ash, soot and smoke that is the direct result of a fire within 100 metres of the insured address.
- If you have a mortgage on your existing house and your house is destroyed, your bank may be able to claim your insurance payout to cover the remaining amount on the mortgage and you may need to borrow money to rebuild.
- Should you get complete replacement cover home insurance?
- Top home insurance claims in Australia – Are you covered?
- What does my AAMI Home and Contents Insurance cover?
Insurance is issued by AAI Limited ABN 48 005 297 807 AFSL 230859 (AAI) trading as AAMI. Any advice has been prepared without taking into account your particular objectives, financial situation or needs, so you should consider whether it is appropriate for you before acting on it. Please read the relevant Product Disclosure Statement before you make any decision regarding this product. The Target Market Determination is also available.