Home Insurance glossary

Home and contents insurance is vital to protect your most treasured possessions, but do you understand what you’re buying? Here’s a quick guide to help explain common policy terms.

Any event you did not plan, intend or expect to happen, such as a visitor’s child hitting a ball through your window.
Building replacement value
The amount it would cost to completely rebuild your home at current market prices, including the value of any home improvements.
Common property
An area within a multi-use residency which is used by many people, such as the driveway or stairs.
Unfixed household goods, valuables and personal effects that you own, including clothing, electrical appliances, furniture and household equipment. For unit dwellers, contents comprises fixtures and fittings in the unit which are not legally part of the building for insurance purposes.
Cooling-off period
Fourteen-day period after the start of insurance in which policyholders who have not made a claim can cancel the policy and obtain a full refund of any premiums paid, less any taxes or duties.
Duty of Disclosure
Obligation of the insurance policyholder to tell the insurer everything relevant that a “reasonable person” in the same circumstances could be expected to disclose. This information can affect the amount of the premium and any special conditions being applied. If unsure, it is better to disclose since those who fail to comply with their duty of disclosure may have their policy cancelled or claim payment reduced to nil.
A single occurrence that results in loss or damage, or a series of events attributable to one cause. For example, a freak storm causes flooding to your property as well as hail damage to your windows.
The amount you are required to pay when you make a claim under your insurance policy. This is shown on the Insurance Certificate.
Items that can be removed from the home without causing damage, such as curtains and blinds.
Items that are permanently attached or fixed to your home, such as the kitchen sink, but not carpets, curtains or rugs.
Your spouse, partner or de facto who lives with you; your parents and parents-in-law; you or your spouse’s children; your brothers and sisters.
The covering of normally dry land by water which has escaped or been released from the normal confines of a canal, creek, dam, lake, reservoir, river or other natural watercourse. For example, after heavy rainfalls the nearby river bursts its banks and floods your home.
Forced entry
Unlawful entry into your home, including by picking locks or breaking a window open. It does not mean opening an unlocked door or window.
The burning out of an electric motor or its wiring caused by its motor’s electric current. Items commonly subject to a fusion claim include clothes dryers, refrigerators and washing machines.
A fully enclosed building with walls and a roof used primarily for residential purposes. This includes domestic fixtures and structural improvements, including clothes line, fixed floor coverings, any garages or patios, insulation, wallpaper and any electrical or gas appliances which are permanently connected or plumbed to the electricity or gas supply.
Insurance Certificate
Document provided by the insurer which shows the cover chosen, period of insurance and other policy details.
Insured events
Events which are insured under your policy, subject to its terms and conditions.
Malicious damage
Damage caused by a wrongful act which was vindictive, deliberate or intentional, such as a vandal damaging your mailbox.
New for old
Should your contents be damaged or stolen, the insurer will replace them with new items or repair them with new parts available at the time of replacement.
Optional cover
Extra cover above that included in the standard policy, available for an extra premium.
The amount you pay for insurance. Other charges include stamp duty, GST and other government charges, and the Fire Services Levy (if applicable).
Product Disclosure Statement (PDS)
The document that contains the terms of your insurance cover, including important information about the features and benefits to help you decide if the cover is right for you. It should be read in conjunction with the Insurance Certificate.
The slow escape of a liquid through porous material, such as concrete or wooden floors.
The land on which your home is located, including the garden or yard but excluding the nature strip or any common property in a multi-residency property, such as the stairs.
A violent atmospheric disturbance often producing a combination of strong winds, hail, lightning, rain or snow and including cyclones, but not heavy rain or wind by itself.
No one is living and sleeping in the home, and/or it is not furnished for habitation.

Still confused? Contact Real Insurance’s friendly customer service staff via phone or email for assistance with your home and contents insurance query.

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