What does home insurance cover?

‘Home insurance’ is an umbrella term that encompasses three variations of cover:

  • Home and contents insurance covers your house and other structures on your property as well as your belongings for loss or damage due to events like fire, theft and storms.
  • Home insurance covers your house and other structures on your property, including your garden shed, fences, and in-ground swimming pool.
  • Contents insurance covers the belongings inside your home, including furniture, whitegoods, electrical appliances, clothing, and more.

Terms, conditions, limits and exclusions apply to Budget Direct home insurance; for full details, please read the product disclosure statement.

What events are covered by home insurance?

An ‘insured event’ is an event we cover should it cause loss or damage to your home and/or contents.

Budget Direct covers the following events:

  • Storm and rainwater (flood cover is optional)
  • Fire
  • Theft (or attempted theft)
  • Escape of liquid (e.g. burst pipe)
  • Lightning
  • Impact at home (e.g. fallen tree)
  • Breakage of glass, ceramic and sanitary fixtures
  • Malicious damage, vandalism, riot or civil commotion
  • Explosion
  • Earthquake or tsunami.

What does ‘home’ insurance cover?

Among other things, a Budget Direct home insurance policy covers loss or damage to:

  • your residential building, including garages
  • other structures like your garden shed and fences
  • domestic fixtures – items permanently attached to your home or buildings (e.g. built-in wardrobes, air conditioner, kitchen cupboards, dishwasher, fixed floor coverings (except carpets), awnings, in-ground swimming pool)
  • permanent structural improvements (e.g. a home extension).

You can be covered for these things up to the amount of your home sum insured.

What does ‘contents’ insurance cover?

Among other things, a Budget Direct contents insurance policy covers loss or damage to:

  • furniture and furnishings
  • computers and electrical appliances
  • kitchenware
  • clothing and shoes
  • valuables like jewellery, sunglasses and cameras (if you want your portable items to be insured when you take them with you away from your home, you’ll need to get extra Personal Effects Cover).
  • fitted carpets and rugs
  • internal blinds, curtains and window coverings.

You can be covered for these things up to the amount of your contents sum insured.

Note that benefit limits apply to certain contents.

What optional extras does home insurance come with?

For an additional premium, you can customise your Budget Direct home and/or contents insurance by adding one or more of the following optional covers to your policy:

Can be added to a home or contents policy
Flood Cover Cover for damage or loss caused by flooding rivers, creeks, lakes, dams and other bodies of water.
Accidental Damage Standard cover includes breakage of glass, ceramic and sanitary fixtures; Accidental Damage extends this cover (some exclusions apply – please read the PDS).
Landlord Covers

Landlords can choose one or both of the following:

  1. Tenant default cover
  2. Theft and malicious damage by tenants and their visitors.
Motor Burnout In case a power surge burns out a motor in an electrical appliance you own (less than 10 years old); we can also pay for related spoilage of food.
Can be added only to a home policy
Sum Insured Safeguard If your nominated sum insured is insufficient to repair or replace your home, we'll increase it by up to 25% (e.g. from $400,000 to $500,000).
Can be added only to a contents policy
Personal Effects Cover Insures the portable items (e.g. jewellery, sunglasses, camera) you take with you away from your home. Read more
Commercial Storage
Covers your contents for loss or damage while they're stored in a commercial storage facility. 

You can apply to add one or more of these optional covers when you get a quote and buy a policy or – if you’ve already bought one – by calling us on 1800 182 310 or logging into your online account and editing your policy.

Does home insurance cover storms?

Yes – your Budget Direct-insured home and/or contents are covered for damage or loss due to violent winds, lightning, rain, hail and snow.

This cover includes the escape of rainwater from any water pipe, drain or gutter; and surface run-off of rainwater from surrounding areas that occurs within 24 hours of the storm or heavy rain.

To insure your home against floods, you need to take out optional Flood Cover.

Does home insurance cover water damage?

Yes – Budget Direct covers water damage to your home and/or contents caused by, for example:

  • escape of rainwater from any water pipe, drain or gutter
  • burst or leaking water pipes
  • overflowing sinks, basins, baths and appliances.

To be covered for water damage resulting from a flood, you need to take out optional Flood Cover.

Does home insurance cover leaks?

Yes – Budget Direct home and/or contents insurance covers escape of liquid in the home, including water damage caused by burst or leaking water pipes and overflowing sinks, basins, baths and appliances.

Note that we do not cover damage caused by leaks in shower walls and bases resulting from normal wear and tear to tile grout and silicone joints, for example.

That’s because these leaks are considered preventable through periodic maintenance and repairs.

We will pay reasonable costs to investigate the escape of liquid if it is causing damage to your home or contents.

Does home insurance cover floods?

Your home and/or contents can be covered for floods if you take out Budget Direct’s optional ‘Flood Cover’.

This cover protects you against loss or damage caused by flooding rivers, creeks, lakes, dams and other bodies of water.

You can apply to add Flood Cover to your home and/or contents insurance policy when you get a quote and buy insurance or – if you’ve already bought cover – by calling us on 1800 182 310 or logging into your online account and editing your policy.

If you meet our underwriting criteria, we’ll approve your application.

Note that your Flood Cover will take effect 72 hours after you add it to your policy, unless the policy:

  • commenced immediately after another policy covering the same risks expired, without a break in cover
  • commenced on the same day you bought your home or moved to a new address.

This is designed to stop people taking out cover immediately before anticipated floods and then claiming. This in turn helps keep your premiums down.

Does home insurance cover plumbing?

Budget Direct Home Insurance can cover sudden or unexpected loss or damage to your home’s plumbing systems due to one of our 10 insured events

However, we won’t cover the cost to repair or replace drainage, sewage, heating or cooling systems that have become faulty or leaky due to gradual and expected wear and tear (e.g. rusty pipes). 

That’s because these problems are considered preventable through periodic maintenance and repairs. 

This includes clogged toilets, blocked drains, leaky fixtures, faulty hot-water systems, and low water pressure. 

While you’re responsible for the cost of maintenance and repairs, we can cover the cost to repair unforeseen escape of liquid (e.g. damage caused by a leaky pipe in a wall cavity).  

If we accept a claim for escape of liquid, we’ll pay the reasonable costs to investigate the escape of liquid, if it’s causing damage to your home or contents. However, we don’t cover repairs to the burst pipe, or other leak source.

Does home insurance cover hot-water systems?

Budget Direct can cover the cost to repair or replace your hot-water system (e.g. electric, heat pump, solar) if it’s damaged or destroyed by an insured event (e.g. a fire).

We can also cover any damage to your home and/or contents caused by water escaping from the system.

However, we won’t cover the cost to repair or replace a faulty hot-water system.

Does home insurance cover burglary or theft?

Yes – Budget Direct home and/or contents insurance covers loss or damage caused by theft or attempted theft at the insured address, as long as you report the incident to police.

Please note:

  • We’ll cover thefts from common areas, garages, car parks and storage areas of apartments, flats, units, townhouses and other multi-occupancy dwellings only if there is evidence of forced entry.
  • The most we’ll pay for contents stolen in the open air at an insured address is $1,000.
  • If you’re a landlord and would like to be covered for theft by your tenant (or their visitors), you’ll need to add optional ‘Theft and Malicious Damage by Tenants’ to your policy.

Does home insurance cover termite damage?

No — Budget Direct Home Insurance does not cover loss or damage caused by termites (and other insects, birds, lizards, rodents, or vermin). 

Home insurance is designed to cover loss or damage resulting from sudden or unexpected events (e.g. storm and fire). 

In contrast, termites are found virtually everywhere; they are a known and ever-present risk.  

The CSIRO recommends properties be inspected at least annually to detect termites before they do serious damage.  

When insuring your home, it should be in good condition and have no defects or faults that pose a risk to what’s covered under your policy. 

This includes any existing termite damage that, unless it’s fixed, could worsen the damage caused by an insured event (e.g. a storm).

Indeed, if your home is not in good condition at the time of the loss, it may affect your cover and ability to claim. 

Does home insurance cover accidental damage?

Budget Direct home insurance includes accidental breakage of:

  • fixed glass (e.g. glass windows and doors)
  • ceramic fixtures (e.g. cooktops and oven doors)
  • sanitary fixtures (e.g. basins, baths and toilets).

Our contents insurance includes accidental breakage of fixed glass in:

  • furniture
  • pictures
  • mirrors.

You can extend this cover by adding optional ‘Accidental Damage’ cover to your policy (some exclusions apply – for details, please read the product disclosure statement).

You can do this when you get a quote and buy a policy or – if you’ve already bought one – by calling us on 1800 182 310 or logging into your online account and editing your policy.

Does home insurance cover power surges?

Budget Direct home and/or contents insurance covers loss or damage caused by power surges or fluctuations resulting directly from lightning strikes.

Note that to be covered for fridge or freezer motor burnouts caused by power surges, you’ll need to add optional ‘Motor Burnout’ cover to your policy.

Does home insurance cover total replacement?

It’s important you insure your home and contents for their total replacement cost.

This reduces the risk of underinsurance — the shortfall between the cost to rebuild a home or buy new contents and the amount they’re insured for.

If you’re uncertain how much to insure your home and/or contents for, you can use our home insurance calculator and/or our contents insurance calculator to estimate the cost to replace them.

For extra peace of mind, you can add optional Sum Insured Safeguard cover to your home-building insurance policy.

If you have this cover and we decide the cost to repair or replace your home exceeds your sum insured, we’ll increase it by up to 25% (e.g. from $400,000 to $500,000).

Does home insurance cover temporary accommodation?

Yes – if an insured event causes damage to your home that makes it unfit to live in, we can arrange temporary accommodation for your family and household pets while your home is being repaired – up to 10% of your sum insured, up to 12 months.

The amount we’ll pay for your temporary accommodation will be based on the weekly rent your home could hypothetically command on the open market.

This benefit also applies if loss or damage to your contents due to an insured event makes your home unliveable.

We’ll pay the cost of temporary accommodation in addition to your total sum insured.

Does home insurance cover tree removal?

If a tree falls on and damages your house, Budget Direct can pay the reasonable costs to remove the tree before the repairs start. 

There are some circumstances in which we won’t cover tree damage or removal, namely:

  • cost of removing or disposing of tree stumps, or branches of trees that have not damaged your home 
  • loss or damage caused by lopping or felling of trees when this is performed or authorised by you, your family, or a household member, unless completed by a professional tree removal business   
  • loss or damage caused by the roots of trees, plants, shrubs, or hedges.

Does home insurance cover storage of undamaged contents?

Yes – we’ll cover the costs of reasonable and appropriate storage for your contents in a commercial storage facility, provided they:

  • Cannot reasonably be stored at your temporary accommodation
  • Cannot remain in the home.

Does home insurance cover leaky roofs?

Budget Direct can cover roof leaks caused by one of our 10 insured events.

For example, if a hail storm damages your home’s roof and causes it to leak, we may pay to repair the roof as well as any water-damaged parts of your home or contents. 

However, we won’t cover any loss or damage caused by rain, hail, wind, snow or dust due to:

  • An opening that wasn’t created by the storm (or any other insured event)
  • Defects in the design, structure, materials, workmanship or construction (that you knew about, or should have reasonably known about)
  • Rain entering the building due to construction or alteration
  • The home not being in good condition, including guttering and drain pipes.

Put simply, if your home is not in good condition at the time of the loss, or if you haven’t fully fixed any faults or damage to your home or contents that you should have reasonably been aware of, damage from an insured event could be worse than if you had fixed it. This may affect your cover.

Does home insurance cover broken windows?

Yes – Budget Direct home insurance covers loss or damage to glass windows (as well as fixed glass in any door, skylight, shower screen, balcony or pool fence; and solar-heating and other fixed-glass panels).

Does home insurance cover fences?

Yes – Budget Direct home insurance covers loss or damage to your gates and up to 500m for fences, as long as they were structurally sound and well maintained immediately prior to the loss occurring.

Does Home Insurance cover retaining walls?

Retaining walls aren’t covered under Home Insurance. This includes damage caused by natural disasters like flooding, storms and heavy rainwater, or hydrostatic pressure.

Does home insurance cover garages?

Yes – Budget Direct home insurance covers loss or damage to your garage or carport due to an insured event.

These events include impact at the home, for example due to a tree falling on your garage during a storm.

Does home insurance cover pools?

Budget Direct home insurance covers in-ground swimming pools (and spas and saunas that are permanent fixtures) at the insured address, including their accessories.

Budget Direct contents insurance covers above-ground or inflatable swimming pools (or portable spas), including their accessories.

Does home insurance cover solar panels?

Budget Direct considers solar panels that are permanently fixed to your residential building to be a part of the home.

As such, our Home Insurance covers loss or damage to solar panels due to an insured event (e.g. a hailstorm, fire).

If you have solar panels on your home, don’t forget to consider them when calculating the cost to replace your home if it’s totally destroyed, for example, by fire.

If you’ve had solar panels installed recently, consider updating the amount your home is insured for to cover them (subject to our acceptance of the new ‘sum insured’).

You can do this at any time by contacting us or logging into your online account and editing your policy.

Does home insurance cover air-conditioners?

Budget Direct home insurance covers loss or damage to domestic fixtures, including fixed air-conditioners.

Does home insurance cover carpets?

Yes – Budget Direct contents insurance covers loss or damage to your carpets.

Note that there is a limit on the amount we’ll pay to replace hand-woven carpets and rugs.

Does home insurance cover curtains?

Yes – Budget Direct contents insurance covers loss or damage to internal blinds, curtains and window coverings.

Does home insurance cover valuables like jewellery?

Yes – Budget Direct contents insurance covers valuables like jewellery, watches, memorabilia, and stamps.

Note that there are limits on the amount we’ll pay to replace certain contents.

If you want to insure an item for more than the limit, you’ll need to specify, or list, the item on your policy when you get a quote and buy the policy; if you’ve already bought one, you can call us on 1800 182 310 or log into your online account and edit your policy.

Does home insurance cover gadgets?

Yes – Budget Direct contents insurance covers gadgets like mobile phones, laptops and computer tablets for loss or damage inside your home due to an insured event.

This includes events like theft and fire but excludes accidental damage (e.g. due to you unintentionally dropping a gadget on the floor at home).

This is unless you’ve added optional Accidental Damage cover to your policy, which covers accidentally damaged laptops and computer tablets (but not mobile phones).

If you insure your mobile phone, laptop or tablets under optional specified personal effects, they will be covered for accidental loss or damage anywhere in Australia and New Zealand, and anywhere else in the world for up to 90 days of your departure from Australia.

Does home insurance cover mobile phones?

Budget Direct contents insurance covers mobile phones for loss or damage inside your home by an insured event.

This includes events like theft and storms but excludes accidental damage (e.g. due to you dropping your phone on the floor at home).

If you insure your mobile phone under optional specified personal effects, it will be covered for accidental loss or damage anywhere in Australia and New Zealand, and anywhere else in the world for up to 90 days of your departure from Australia.

Does home insurance cover laptops and computer tablets?

Budget Direct contents insurance covers laptops and computer tablets for loss or damage inside your home by an insured event.

This includes events like theft and fire but excludes accidental damage (e.g. due to you unintentionally dropping your laptop or tablet on the floor at home) — unless you’ve purchased optional Accidental Damage cover.

If you insure your laptop or tablets under optional specified personal effects, they will be covered for accidental loss or damage anywhere in Australia and New Zealand, and anywhere else in the world for up to 90 days of your departure from Australia.

Does home insurance cover televisions?

Budget Direct contents insurance covers loss or damage to your television due to an insured event (e.g. fire or theft).

Note that, to be covered for accidental breakage of your television’s glass, you must add optional ‘Accidental Damage’ cover to your policy.

Does home insurance cover valuables I take with me away from my home?

We offer Personal Effects cover as an optional extra to cover your portable contents. This can cover a wide range of categories of belongings, including:

  • bicycles
  • clothing
  • jewellery/watches
  • musical instruments
  • photographic equipment
  • sporting equipment
  • medical aids
  • mobile phones (Specified only)
  • laptops/tablets (Specified only)
  • e-scooters.

To find out how much this coverage might cost, you can get a quote online.

Personal Effects Cover

If you want these items to also be insured when you take them with you away from your home, you’ll need to add optional ‘Personal Effects Cover’ to your policy; you can choose one or both of two cover types:

  • Unspecified Personal Effects: These are portable items not specified, or listed separately, on your policy. The most we’ll pay per item is $1,000. You are required to nominate a total cover amount for a group of items damaged or lost in any one insured event: $1,000, $2,000, $3,000, $4,000, or $5,000.
  • Specified Personal Effects: These are portable items specified, or listed separately, on your policy, with individual descriptions and values.

For an additional premium and subject to our approval, you can add one or both of the above mentioned personal effects covers to your policy.

You can do this when you get a quote and buy a policy or – if you’ve already bought one – by calling us on 1800 182 310 or logging into your online account and editing your policy.

Does Contents Insurance cover my guests’ belongings?

Under the right circumstances, yes. We will pay up to $500 to repair or replace items owned by your guests or visitors if:

  • The items are lost or damaged by an insured event at your insured address
  • The items would be considered contents under this policy if they were owned by you
  • We would have paid a claim for those lost or damaged items if they were owned by you.

There are certain items that aren’t covered, such as electronics, cash, or commercial equipment (such as work computers). For a full list of what items of your guests are and aren’t covered, please refer to the Product Disclosure Statement (PDS).

I'm a landlord – what am I covered for?

Budget Direct home insurance covers you for, among other things:

  • loss or damage to your investment property
  • loss or damage to floor coverings, internal window coverings, and light fittings — up to 5% of your home sum insured
  • loss of net rental income for the period your property is unliveable due to an insured event — up to 10% of your sum insured.

You can also, for an additional premium, add one or both of these optional landlord covers to your insurance policy:

  • Tenant default — in case your tenant fails to pay their rent or leaves unexpectedly
  • Theft and malicious damage by tenants — covers theft or damage by your tenants and their visitors — When we insure your home, we will pay up to $150,000 and when we insure your contents, we will pay up to $20,000.

Read more about landlord insurance

Does home insurance cover lost rental income?

Yes – you are covered for the loss of net rental income for the period your Budget Direct-insured property is unliveable due to an insured event – up to 10% of your home sum insured.

You can also, for an additional premium, add one of our optional landlord covers to your insurance policy. These covers include ‘Tenant Default’, in case your tenant fails to pay their rent or leaves unexpectedly. Upon acceptance of your claim, we will pay up to the amount stated on your Insurance Certificate, less the basic and additional excesses.

Does home insurance cover my mortgage?

Budget Direct home insurance can cover the cost of replacing a mortgaged house if it’s totally destroyed by an insured event (e.g. fire) – we will pay an amount equal to the replacement value of the property destroyed, or the sum insured, whichever amount is lowest.

Home insurance should not be confused with ‘mortgage insurance’, of which there are two broad types in Australia (neither of which is offered by Budget Direct):

Mortgage protection insurance is taken out by the borrower and covers their home loan repayments in case they lose their job, become seriously ill, or die.

Lender’s mortgage insurance (LMI) is taken out by the lender and covers them if the borrower is unable to meet their mortgage repayments and the property has to be sold; if the sale proceeds do not cover the outstanding loan balance, the lender can claim the shortfall.

Does home insurance include public liability cover?

Yes – Budget Direct home and/or contents insurance includes public liability cover (also known as legal liability cover).

It can cover your legal liability for death or physical injury to other people, or for loss or damage to other people's property caused by an accident at the insured address (Home Insurance) or anywhere in Australia (Contents Insurance).

Also, let us know if you expect to incur legal costs, where it’s possible for you to do so. If we accept your claim, we will cover the applicable legal costs that have been incurred (provided you’ve obtained our consent).

The most we'll pay for all liability claims (including legal costs) arising from any one accident is $20 million (including GST), less any applicable excess.

Does home insurance cover unoccupied homes?

When taking out a new policy:

Budget Direct covers loss or damage to your home and/or contents if your home is unoccupied or vacant up to a maximum of 180 consecutive days, subject to the policy terms and conditions.

When your home is unoccupied for more than 60 consecutive days, the following security and safekeeping conditions apply:

  • Your home must be secure, all windows and doors locked, and security devices activated.

  • Gardens and lawns must be tidy, and your mail, newspapers and deliveries collected.

  • You must arrange for someone to check inside and outside your home regularly.

If you do not comply with these conditions, we may (where permitted by law):

  • Refuse to pay a claim

  • Reduce the amount we pay for a claim

  • Cancel your policy

When your home is unoccupied for more than 60 consecutive days, and you make a claim, an additional $1,000 excess will apply.

We will not provide any cover under the policy while your home is unoccupied if your home has been unoccupied for more than 180 days.

Does home insurance cover personal injury?

Budget Direct home and/or contents insurance covers some of the costs arising from personal injuries and death, under specific circumstances. If we accept your claim, we’ll also cover the applicable legal costs. Just let us know if you expect to incur legal costs (where possible).

If you are injured or die

We may pay for modifications to your home – up to $5,000 – if you suffer permanent paraplegia or quadriplegia as a direct result of an insured event at your home.

We may pay for your funeral expenses – up to $7,000 – if you are injured by an insured event at your home and die within 90 days of it.

If someone else is injured or dies

We may cover your legal liability – up to $20 million – for someone else’s accidental death or injury at the insured address (home insurance) or anywhere in Australia (contents insurance).

Note that this legal liability cover does not include:

  • Injuries sustained during renovations valued at more than $50,000
  • Deaths or injuries to you or your family members (but does include deaths or injuries to domestic boarders or tenants in your home).

Does home insurance cover spoilt food?

Yes – Budget Direct contents insurance covers food spoilage caused by an insured event.

Note that to be covered for food spoilage resulting from a burnt-out fridge or freezer motor, you’ll need to add optional ‘Motor Burnout’ to your policy.

Does home insurance cover renovations?

If the renovations increase the replacement cost of your home, you may decide to increase the amount your home is insured for – the ‘sum insured’.

If the renovations involve removing the roof or external walls, building-in under your home, raising your home, or removing or replacing stumps you must tell us as soon as possible.

You can increase your sum insured at any time by contacting us or logging into your online account and editing your policy.

Does home insurance cover asbestos removal?

If Budget Direct accepts your claim and, in the course of repairing your home, we discover it contains asbestos, we can pay to have it safely removed. 

We will only remove the asbestos that is part of the damaged area being repaired.

Otherwise, we do not cover any loss, damage or legal liability you incur due to any asbestos at the insured address.

If your house was built before asbestos was banned nationwide on 31 December 2003 and you plan to renovate it, you may wish to get it inspected for asbestos before starting work.  

If asbestos is found, you may decide to get it removed by a licenced contractor at your expense.

Does home insurance cover mould?

Budget Direct home and contents insurance can cover mould damage that results directly from of one of our 10 insured events (e.g. storm and rainwater).

In all other circumstances, mould damage is not covered.

Homeowners can help prevent mould by reducing the moisture or humidity levels in their home (e.g. by fixing leaky pipes, dehumidifying the air).

Does home insurance cover arson?

Budget Direct home and contents insurance covers 10 insured events, including fire, malicious damage and vandalism. 

These include acts like arson, whereby a person intentionally damages your property by setting it on fire.

You must report the arson to the police as soon as possible, before lodging a claim with us.

If you’re a landlord and you want your property to be covered for a fire intentionally lit by your tenant, you must add optional ‘Theft and malicious damage by tenants and their visitors’ to your policy.

Budget Direct does not cover any loss, damage or legal liability a policyholder incurs if they or someone with their knowledge and permission commits or attempts to commit a crime, including arson.

Are my contents covered while I’m moving house?

If you have Contents Insurance, we can pay up to 20% of the value of items damaged while being moved to another Australian address. However, that sum will only be paid if the damage is caused by:

  • A fire
  • A collision or overturning of the vehicle transporting those items.

We will cover your contents at both your new and old address for up to 14 days after you first start to move. You must tell us about your new address if you want your contents to be covered there.

Are my contents covered while they’re in a storage facility?

If you have selected (and we have agreed to) optional Commercial Storage cover, there are circumstances when your items will be covered. For example, the items may need to be in storage because you are:

  • Moving home
  • Travelling overseas
  • Completing renovations.

This option only covers items that are covered under your usual Contents Insurance, during the time your insurance is active, and we will only cover loss or damage caused by insured events.

For a full list of insured events and items covered under optional Commercial Storage cover, please read the PDS.

Will my home insurance cover keep up with inflation?

At the end of each insurance period, Budget Direct automatically increases your home and contents sums insured to help them keep pace with rising costs.

This requires us to charge a higher premium for the increased cover.

(If you wish, you can decline the higher sum insured; your premium will be adjusted accordingly.)

Note that we will not automatically increase the sums insured for your listed, or specified, contents and personal effects.

We recommend you get jewellery, collections, art works and the like valued every so often by a suitably qualified professional to ensure they’re adequately covered.

Get a home contents insurance quote online