Does Home Insurance Cover Temporary Accommodation?

Dealing with repairs if your home becomes unliveable can be incredibly stressful. Having tradespeople in your home and trying to find somewhere suitable to live while it's being repaired can be difficult to juggle all at once.

If you have Building or Contents Insurance with Budget Direct and your home becomes unliveable due to an insured event, we can help pay for your temporary accommodation costs — if we agree to pay your claim. Although, how much you'll receive, how long you'll be covered for and what counts as reasonable accommodation will all depend on your policy.

But what exactly is covered under this benefit if your house is affected? We'll outline what you need to know in case an insured event at your home such as a fire, impact, storms or an explosion leaves your home unliveable. To find out what events are covered, refer to the Product Disclosure Statement (PDS).

If an insured event occurs at your address which causes your home to become unliveable, and we accept your claim, we will cover the reasonable temporary accommodation costs up to a maximum of 12 months. This is dependent on your sum insured and benefit limit listed on your policy. However, if there is a total loss, we may cash settle your claim.

With temporary accommodation, we'll take into consideration several factors, including your circumstances, your living situation at the time of the insured event as well as your benefit limit. If you own your home we will use the weekly long-term rentable value of your home as a guide for the amount we may pay you.

To receive temporary accommodation, your home insurance policy requires the home to be your permanent address and for you to be living in it at the time of the loss or damage.

For renters with a contents insurance policy we also cover temporary accommodation costs up to a maximum of 10% of your contents sum insured. However, we will deduct your usual rental expenses from the amount we pay.

For example, if your usual rental payments are $400 per week, and your temporary accommodation cost comes to $500 per week, we will pay you $100 per week to cover the difference in rent while the home is being fixed.

Step 1:

Gather all the information you may need to make your home insurance claim. This includes details of the incident such as what happened, the time and date, the insured address and any supporting photos of the damage or loss.

Step 2:

Lodge your claim by contacting us as soon as possible. You can start your claim online, talk to a team member on our webpage chat function or call us on 1800 069 336.

Step 3:

Once we've received your claim, we'll determine the next best step which may include; appointing a builder or Assessor to assess the damage or loss at your property, appointing a specialist if required or requesting documents from you to assess the claim. Through this process we'll determine if your home is unlivable due to the insured event and if your claim is accepted.

Step 4:

Should your claim be accepted and unlivable, a claims officer will discuss reasonable accommodation options with you, taking into consideration your policy coverage and current living situation.

Step 5:

Contact us, should you incur any temporary accommodation costs on your claim. We may give you guidance on what a reasonable amount per night is in your area and request you to keep receipts until your claim is accepted.

The amount we pay for temporary accommodation cover is not unlimited. We will pay up to 10% of your home or contents sum insured for up to a maximum time period (see below). If the same event damages both your home and contents leaving the home unliveable, we’ll only pay up to the higher of the two limits.

If your claim is accepted and you need temporary accommodation, we’ll pay up to 10% of your home or contents sum insured if you're an owner occupier or renter.

These funds are used to pay for your temporary accommodation to provide you with a suitable living arrangement while your home is being repaired if it is unliveable. The amount we pay is in addition to the home or contents sum insured.

This is why correctly estimating your contents or home sum insured is important as it can ensure you have the right financial support if damage from an insured event ever occurs at your home. To help accurately estimate a figure, you can use our home and contents insurance replacement cost calculator.

We'll cover your temporary accommodation costs for up to a maximum of 12 months from the date the damage occurred. 

We will stop paying temporary accommodation costs when you reach whichever limit comes first, whether the 12 months have surpassed since the date of the incident, or if you've been paid up to the 10% of your home or contents sum insured. If your home becomes livable again during this time, we will also stop paying temporary accommodation costs.

Our assessor or builder will determine if the home is unliveable. As outlined in the Product Disclosure Statement (PDS), a home is unliveable when it's so damaged that:

• Normal domestic activities like cooking and sanitation cannot be performed, or
• Local authorities will not provide permission for the home to be inhabited, or
• We otherwise agree that you can't live in the home.

The costs that are included within this benefit can help you get back on your feet after an insured event has affected your home.

When considering the type of accommodation for you or your family, we'll consider options which are clean, comfortable and at a reasonable cost for the timeframe needed. We will also consider and consult with you, the best options for your pets. This may mean finding accommodation which accepts pets or boarding costs.

And if your contents can't be stored at the temporary accommodation or remain in your home during repairs, payment for the costs of a reasonable commercial storage facility to hold your possessions is also included. This will provide you with the comfort of knowing that your personal belongings are safe during this time.

There are several situations that we won't cover under this benefit. This includes:

• The cost of temporary accommodation once your home is livable or the reasonable timeframe to repair your home to a livable state if we cash settle your claim.
• We will not pay for any temporary accommodation costs if your claim is not accepted.
• If your home is rented to tenants and the home is unlivable, where applicable we will review your loss of rent under the loss of rent benefit on your policy. But we will not pay for any temporary accommodation required by your tenant.
• We'll only cover accommodation that is priced reasonably within your area and meets you and your families needs. For example; we may determine that a one bedroom apartment is suitable for two adults for a week, whereas a family of six may need a larger space to be comfortable. However, if a 5-star hotel is the only option available we will select this type of hotel to accommodate you for a couple of nights before finding more suitable accommodation.
• We won't pay for or subsidise you to go on holiday. Any accommodation options provided will be in your local area for a reasonable price. For example, we won't pay for a 5-star hotel in another city or location.
• Costs incurred due to delays you may cause: If you were to cause any delays to your claim being accepted or set back the timeframe to restore your home to its previous condition, the temporary accommodation costs as a result of delaying the process are not included.
• Extra costs if you decide not to repair/rebuild your home.
• If you choose to make extra upgrades to your home that are not part of your claim, we won’t cover the additional costs these may lead to. For example, if the insurer repairs to your home take six months to complete, and you choose to make your own upgrades that add a further six months to the project, you will need to cover your own temporary accommodation costs for those extra six months.

As long as you don't cause delays to your claim or repair work, your temporary accommodation cover will continue for the time it takes to repair or rebuild your home to  a livable state as long as it's up to the maximum 12-month period or the 10% sum insured limit (whichever is sooner).

We recommend regularly reviewing your policy details to ensure that your sum insured amounts are up-to-date so you know exactly what support you'll receive if you need it.