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Basics of House Insurance

05 March 2019 | Posted in: Home Buyers, Home Owners

TOWER INSURANCE have a section titled “What your house is insured for’ and state that “Your house is covered for loss”

The glossary of words gives further wording as follows

‘’Sudden and accidental physical loss or sudden and accidental damage occurring during the period of insurance in New Zealand’’.

This, in essence, defines then what you’re going to be able to claim for. I would expect all the Insurance companies would have fairly similar wording.

But how does it relate to you and especially if you are buying a home for the first time and don’t really know what it all means? You may think that insurance just covers everything no matter what. NO.

Look at the words singularly

    • Sudden………….occurring or done quickly and unexpectedly or without warning
    • Accidental………happening by chance, unintentionally, or unexpectedly.
    • Physical…………the damage is physical and can be seen.
    • Loss……………..the fact or process of losing something
    • Damage…………physical harm that impairs the value, usefulness, or normal function of something

So if it meets all these criteria then you can claim.

A FEW CLAIM EXAMPLES TO GIVE CONTEXT

1. A tree falls onto the roof of your house in a storm.

    • Sudden…….YES
    • Accidental…YES
    • Physical……YES there is severe damage to the house
    • Damage……YES

2. Man cooking dinner sets fire to kitchen………same as the above.

3 Man sets fire to house deliberately

    • Sudden…….YES
    • Accidental…NO………deliberate damage is never covered
    • Physical……YES
    • Damage……YES

4 Damage behind the walls in a bathroom or kitchen caused by a slow leak from a water pipe occurring over a long period of time

    • Sudden…….No
    • Accidental…YES
    • Physical……YES
    • Damage……YES

Example number 4 is quite possibly the most contentious issue for somebody hoping to make a claim. Following the logic that it is not a sudden event, it means there is no claim. However, the insurers do pay some of the cost with limits. Usually, they will pay on or around $2,000. Read the dreaded policy wording.

So if something happens around the house ask yourself is it sudden? , is it accidental? , is it physical? , is there loss or damage.? If they all answer YES then you may be able to claim. If No you may still have a claim.

This article is only giving you some tips about house insurance. It is not giving advice.

If in doubt ensure you use a House insurance broker. They are working for you.

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