You may be surprised by what AAMI covers

By AAMI 03 March 2025

Chances are, you know the basics of what your home and contents insurance covers. But there might be more to it than you assume. For example, did you know that we provide cover if a meteorite impacts your home or causes a power surge which results in damage to your home?

While not all of the covered events are quite so out-of-this-world, here are some things that are worth knowing.

Food and medication spoilage

Food is generally getting more expensive¹. That means restocking a full fridge and freezer if the contents are spoiled can easily stretch into the hundreds of dollars.

If the contents in your fridge or freezer become spoiled – like due to a fridge malfunction – AAMI Contents Insurance can help cover that spoilage for refrigerated and frozen food at the insured address, up to $400 dollars for any one incident. If you claim under this cover, no excess applies!

We’ll cover this if the spoilage was caused by:

an insured event
the sudden escape of refrigerant fumes
electrical or electronic breakdown, failure, or malfunction, or
the public electricity supply failing to reach the insured address.

This doesn’t stop at food, either – if any refrigerated medicines are spoiled, we’ll help cover that too, up to the same $400 limit! Some exclusions apply, so refer to the PDS for details.

Explore AAMI Home and Contents Insurance

Motor burnout

When was the last time you thought about the electric motors inside household equipment or appliances? These are for things like air conditioners, fridges, or even water pumps. If it burns out or fuses and is less than seven years old, we can help cover the reasonable cost to repair or replace it. This is automatically included with AAMI Home & Contents Insurance, and includes cover for the reasonable cost to repair or replace:

the electric motor or compressor containing the motor
an entire sealed unit, filter, dryer and re-gassing if the electric motor is inside a sealed refrigeration or air conditioning unit, and
a swimming pool water pump, combined with its electric motor, if the replacement pump motor cannot be bought on its own.

We’ll engage with our trusted supplier network to figure out the cost of repairs or replacement. If the quoted cost for repairs is less than the cost of replacement, we’ll authorise the repairs.

However, if it’ll cost more to repair the motor than to replace the appliance or if the motor cannot be repaired, we’ll then offer to replace the entire appliance. If you don’t accept our offer to repair or replace the motor, then we’ll pay the quoted cost for repairs or the value of our replacement motor (as applicable). Check the relevant PDS for more details and a rundown on exclusions.

Flood cover automatically included

While other insurers might offer flood cover as an optional extra to add to your policy for an additional premium, AAMI includes it in our policies from the get-go. That means as long as you are not an existing customer who has removed cover from your policy, you can have peace of mind and know we’ll provide cover against flooding.

Your certificate of insurance will show if you are not covered for flood.

Exploratory costs for escape of liquid claims

AAMI Home Building Insurance provides cover for loss or damage to your home caused by the sudden and unexpected escape of liquid from certain appliances, fixed pipes, drains and more. We also cover loss or damage caused by liquid escaping from these items that has occurred gradually when it wasn’t easily visible to a reasonable person in the circumstances.

Finding the source of a leak in your home can be time-consuming, frustrating, and expensive. But we’ll provide cover for the reasonable costs of locating the source of the escape of liquid, as well as repairing and restoring the damage that’s caused by the exploratory work. We’ll do this as long as the escape of liquid is covered as an insured event and the loss or damage isn’t caused by wear, tear, or deterioration.

If the leak isn’t covered as an insured event under ‘Escape of liquid’, we may still provide some limited cover for those exploratory costs. That is, we’ll pay the reasonable and necessary costs for each incident to locate the source of liquid escaping at the insured address and to repair and restore any damage to the building that is caused by the exploratory work. On top of that, there’s no excess if you claim under this cover, which means one less thing to worry about.

For more info on escape of liquid coverage including exclusions, check the relevant PDS.

AAMI’s Complete Replacement Cover

We all want our home and belongings protected against life’s surprises.

But what if there is an insured event and the amount listed on your certificate of insurance isn’t enough to rebuild your home or replace your contents?

This is known as underinsurance.

Underinsurance can happen for many reasons:

If your home or contents are not valued according to their repair, rebuild or replacement costs when purchasing or updating your policy.

If you renovate your home but don’t adjust the building value on your policy – also known as the sum insured.

If you purchase new items, like appliances or furniture, but don’t adjust the value of your contents on your policy.

With the cost of living rising, it may be tempting to have a lower sum insured to save money on your insurance premium.

But if you need to claim, your insurance policy might only cover a portion of the repair, rebuild or replacement costs, leaving you to pay the rest.

When it comes to choosing a set sum insured for your policy, there are a few simple steps you can take to help avoid being underinsured.

Use the AAMI Home Building and Contents calculator to get an estimated rebuild cost for your home and estimated total replacement costs for your contents.

A qualified builder can also provide further help with estimating rebuild costs according to current building standards.

Make a list of your belongings to ensure your contents sum insured is accurate. For particularly valuable items, take a photo, note their value, and save any receipts.

Keep this list up to date by adding any new items you purchase for your home.

No two home insurance policies are the same, which means it’s important to read your policy documents.

Knowing what your policy does and does not cover, and any limits that apply, will help give you confidence that you’re covered if you ever need to claim.

With AAMI, you can also choose our optional Complete Replacement Cover for the home building.

Complete Replacement Cover is our best protection against underinsurance as we’ll repair or rebuild your home as it was or pay you the amount of the assessed quote to repair or rebuild it, without you needing to set a sum insured.

And remember, don’t set and forget. As your life circumstances change, so should your home and contents insurance policy.

Regularly review your policy details to ensure your cover is up to date and meets your needs.

Download the AAMI App or log in online to update your policy.

And for other helpful tips, visit the AAMI Informed site.

AAMI offers Complete Replacement Cover, which is an optional cover you can choose for insuring your home instead of setting a specific sum insured.

In less simple terms, this means that if your home needs to be repaired or rebuilt after an insured event, we’ll offer to repair or rebuild your home as it was or pay you the amount of the assessed quote to do so. On top of that, we’ll help cover any spikes in building costs before we settle your claim– which means you won’t have surprise expenses in that area.

Since your home will be rebuilt to the same specifications as it was before, it helps remove the risk of underinsurance. It’s exactly what it says on the lid – a complete replacement! Please see the PDS for full terms and conditions.

Explore Complete Replacement Cover

Legal liability

This one doesn’t cover your building or contents. Instead, it covers your liability to pay compensation for death or injury to other people, or loss or damage to their property. Of course, you still need to take reasonable steps to make your home hazard-free – like fencing off swimming pools or securing damaged buildings.

It can seem unlikely that someone will seriously injure themselves at your house – until it happens. If it does, we can provide legal liability cover for up to $20 million for any one incident.

If you have contents cover, this provides cover for your legal liability for an incident happening in Australia or New Zealand. For example, if you’re legally liable to pay compensation for accidentally injuring someone or causing damage to someone’s property, like by riding your bike into a parked car and causing a dent and damage to the paintwork.

To find out more, or for a full list of inclusions and exclusions, be sure to read the relevant Product Discolsure Statement.

¹ Supermarket Food Prices Rise By 9.6% In Past Year | abc.com.au

Insurance is issued by AAI Limited ABN 48 005 297 807 AFSL 230859 trading as AAMI. Limits, conditions and exclusions apply. Read the relevant Product Disclosure Statement before buying this insurance. The Target Market Determination is also available.
This 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. This information applies to new policies or renewal policies starting on or after 24 January 2025.