Review Home Cover Before You Go
The Age
Monday December 9, 1996
WITH the holiday season edging closer, you might just be starting to turn your mind to a lengthy spell away from home. Before you do, though, it is worth reviewing your household insurance policies. One of the negatives of this time of year is the rise in burglaries and damage to properties. It's bad enough to come back from holidays and find that your home has been damaged or things have been stolen, let alone that your insurance did not cover those losses.
According to Sam Parrino, general manager of the industry complaints body Insurance Enquiries and Complaints, in reviewing your cover, there are a couple of areas to which you should pay particular concern.
"Most household insurance policies contain a general unoccupancy clause," Mr Parrino said. "This varies from insurer to insurer, but the average is about 60 days. If your home is going to be unoccupied for longer than the period specified, you need to inform your insurer.
"The second thing is that if your house is going to be empty, you should check the policy to see what you need to do. Policies will require that you take due and reasonable care to make your property secure."
Malcolm Whitney, manager of consumer affairs for AMP, said: "Our policy specifies the unoccupancy period as 60 days, and if people are going to be away from home longer than this, they'll need extra cover. An additional premium will be charged."
If you are going to be away from home but the house is being minded by a friend or relative, you should still check your policy document.
Insurers differentiate between burglary, where thieves have forced their way into your property, and theft, where goods are stolen but there has not been any forcible entry. Where you have people in your house or unit who are not part of your normal family - a paying tenant, a friend or relative - most policies will cover you against burglary but not against theft where no forcible entry has occurred.
So, if you have invited someone on to your premises and they steal or cause malicious damage, or if something is stolen while they are there and there is no sign of forcible entry, those losses will not be covered.
The same principle applies to holiday homes. If you have a holiday home and you have people staying there who are not part of your normal family, you will not be covered against theft where no forcible entry has occurred.
Holiday homes generally can be an insurance nightmare.
"Because of the much greater risk of vandalism and theft, some insurers won't take on the risk of a holiday home unless your other business is placed with them," Mr Parrino said.
"Obviously the insurance depends on the location of the property," Mr Whitney said. "If the holiday house is in a built-up area, as an insurer you are less concerned about providing the cover than where it is in an open or isolated location. It is something we like to look at on an individual basis. If the holiday home insurance is part of a package of other business, we wouldn't question it. But as a stand-alone, we'd look at it closely and eventually may not insure the property."
Mr Parrino said: "The thing to remember for everyone with an insurance policy is that you are only covered specifically for what is included in the policy. There is a tendency for people to think that because they have a particular household insurance policy, all losses and damages are covered. But in insurance, like elsewhere, the cheapest policy is not necessarily the best. Consumers have got to shop around, look at the different policies and what they offer, and choose the one that is going to provide them with the best deal."
© 1996 The Age
