Domestic insurance includes house and contents insurance. Within the industry it is referred to as "personal lines" insurance.
Are You Covered?
Types of Cover
You can buy personal insurance for different types of cover
Protects your property against a wide range of risks, anywhere in the country. This covers you for accidental damage to and loss of your property, as well as a range of other benefits, which vary from policy to policy.
Policies which offer limited cover for named events such as flood, storm, fire, or theft. Premiums for restricted cover are usually lower than for accidental cover.
House insurance is designed to protect your most valuable asset – your house. There are three types of cover available:
Total replacement (no sum insured). This means that if your house is destroyed, the insurance company will rebuild the house and pay all the fees (ie. architect, site clearance fees) involved in the process. This type of insurance policy is usually only available for houses that are owner-occupied, in good condition or under a certain age.
Fixed sum insured (replacement). This means you and your insurance company agree on the sum insured, and the company will rebuild your house up to that limit if it is totally destroyed.
Indemnity policies (present day value) This is what the house was worth just before a loss. It is roughly equivalent to the market value of the house (excluding the land).
Contents insurance covers the contents of your home. Most contents policies have claims limits. Contents insurance covers the contents of your home:
- Household possessions
Carpets and curtains
Most contents policies have claims limits, especially for valuables, money, documents and collections. Different policies have different restrictions.
There may also be conditions to the cover. You should check these with your insurance company.
There are two types of cover available:
This means that the insurance company will replace a lost or destroyed item with a new one or repair the item so it is as new. However there are some limits to this (ie. items over a certain age may not be replaced). Check the wording of your insurance policy.
With replacement insurance, the item is usually repaired or replaced. If you want the cash, you can only get the indemnity value of the item.
There is also an upper limit on what you can claim. This is specified in the insurance policy as the sum insured. Open-ended policies are available from some insurance companies.
Indemnity policies (present value)
An indemnity policy puts you back in the same position you were in before the loss or damage occurred. The settlement is based on how much you would pay for the item second-hand.
It is important to check in your policy what you are not covered for and what locations your cover applies to.