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)
  • Accidental breakage of glass, ceramic and sanitary fixtures
  • Malicious damage, vandalism, riot or civil commotion
  • Explosion
  • Earthquake.

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 and other bodies of water.
Accidental Damage Standard cover includes accidental damage to glass, ceramic and sanitary fixtures; Accidental Damage extends this cover (some exclusions apply – please read the PDS).
Landlord Covers Protection if your tenant: 1. Defaults on their rental payments; and/or 2. Steals from or maliciously damages your investment property.
Motor Burnout In case a power surge burns out a motor in an electrical applicance 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 (eg: jewellery, sunglasses, camera) you take with you away from your home. Read more

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.

Also, the most we’ll pay towards the cost of locating the unknown source of a leaking pipe is $1,000.

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 hot-water systems?

Budget Direct covers loss or damage to your home and/or contents caused by the escape of liquid from a hot-water system (e.g. electric, heat pump, and solar), however we will not cover the cost to repair or replace the system itself.

Does home insurance cover bushfires?

Yes – Budget Direct home and/or contents insurance covers loss or damage due to bushfires.

Note that your bushfire cover will take effect 72 hours after your insurance policy is issued or renewed, 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 bushfires and then claiming. This in turn helps keep your premiums down.

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 or guests), you’ll need to add optional ‘Tenant Theft and Malicious Damage’ to your policy.

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?

If your home and contents are totally destroyed, for example, by fire, we’ll pay an amount equal to the replacement value of the property destroyed, or the sum insured, whichever amount is lowest.

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 storage of undamaged contents?

Yes – we can pay for the removal and disposal of your damaged contents and the storage of your undamaged contents during the time it takes to repair your home – up to 10% of your sum insured.

We’ll pay this amount in addition to your total sum insured.

Does home insurance cover roof damage?

Yes – Budget Direct home insurance covers the cost to repair or replace your roof if it’s damaged or destroyed by an insured event, including storm and rainwater, lightning, and fire.

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 fences and gates, as long as they were structurally sound and well maintained to begin with.

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.

We do not cover aboveground or inflatable swimming pools (or portable spas), including their accessories.

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 and computer tablets lost or damaged inside your home due to an insured event.

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

Does home insurance cover mobile phones?

Budget Direct contents insurance covers mobile phones lost or damaged 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).

Does home insurance cover laptops and computer tablets?

Budget Direct contents insurance covers laptops and computer tablets lost or damaged 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 laptop or tablet on the floor at home).

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?

Among the items covered by Budget Direct contents insurance are:

  • bicycles
  • clothing
  • jewellery/watches
  • musical instruments
  • photographic equipment
  • sporting equipment.

These items are covered – up to your contents sum insured – if they are lost or damaged by an insured event while inside your home.

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.

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 your rental property’s fixed floor coverings (except fitted carpets) and external window coverings (e.g. awnings) – up to 5% of your 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.
  • Tenant Default – in case your tenant fails to pay their rent or leaves unexpectedly, and/or
  • Tenant Theft and Malicious Damage – also covers theft or damage by your tenant’s visitors or guests – up to $10,000.

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’ll start reimbursing your lost net rental income four weeks after your tenant stops paying and continue paying you until the rental payments resume or your property is re-tenanted.

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

Does home insurance cover unoccupied homes?

Budget Direct covers loss or damage to your home and/or contents if your home has been unoccupied, or vacant, for 60 consecutive days or less.

If you tell us your home will be vacant for longer than that, we may agree to cover it in its unoccupied state for up to 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 sustained under the following scenarios:

If you are injured or die

We can 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 can pay for your funeral expenses – up to $5,000 – 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 can 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 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?

Budget Direct home insurance can cover modifications or extensions to your home.

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’.

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

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