• Motor vehicle
  
• Home and contents
  
• Personal property / tools of trade
  
• Pleasure (water) craft

4.1 Personal motor vehicle

There are typically 3 types of motor vehicle insurance cover available in Australia, being:

1. Comprehensive;
2. Third party property damage, fire and theft;
3. Third party property damage only.

Comprehensive motor vehicle insurance covers fire, theft and accidental damage to the insured vehicle in what is commonly referred to as "Section 1" cover and additionally, "Section 2" cover for liability in property damage to third parties (not personal injury).

The term "third party" is commonly used as an industry reference to other parties involved in a motor vehicle collision. They are a "third party" to the contract of insurance between firstly, the insurer and secondly, the insured. Some policies include benefits such as use of a substitute vehicle or personal injury payout.

Third party property damage fire and theft cover is offered in some cases as a "middle ground" cover for certain vehicles. It covers liability in property damage to third parties, and damage to the insured vehicle for loss from fire and/or theft.

Third party property damage insurance covers only liability in property damage to others. No coverage is provided in respect of own damage, except in some cases where limited cover is given where the insured driver is "faultless", or did nothing to contribute to the accident. That is rare, as all drivers have a duty to drive with due care and attention, including to anticipate and avoid collisions.

4.2 Home and contents

Generally in Australia two types of householder policies are offered:

1. Defined events (or "insured events", "specified perils"); and
2. Accidental damage (also known as "accidental loss or damage")

The accidental damage policy provides a very open coverage as to any physical loss or damage to the insured building and/or contents, subject to exclusions later in the policy. It is relatively easy for an insured person to establish a claim under the policy, which then becomes a matter for the insurer to either accept or deny based on an exclusion, breach of policy term or condition and so on. Typically, accidental damage policies are both more expensive and have higher excesses.

Defined events policies on the other hand, cover the insured for certain events defined by the policy. Differently from accidental damage cover, it is for the insured to establish that the loss falls within one of the defined events. Once this has been successfully established, the insured may still apply an exclusion or deny the claim based on breach of policy term or condition.

Using the Insurance Contracts Regulations (made by Commonwealth Parliament) as a guide, typical events covered include:

1. Fire, explosion, lightning, thunderbolt or earthquake;
2. Theft, burglary, house breaking, or an attempt to commit theft, burglary, or house breaking;
3. A deliberate or intentional act (malicious damage);
4. Bursting, leaking, discharging or overflowing of fixed apparatus, fixed tanks or fixed pipes used to hold or carry liquid of any kind;
5. Riot, civil commotion, industrial or political disturbance;
6. Impact the rising by or out of the use of a vehicle (including an aircraft or a water-borne craft);
7. Impact by space debris, animals, falling trees or part thereof, or television or radio aerial;
8. Storm, tempus, the action of the sea, and so on (flood, high water, tsunami, erosion, landslide or subsidence are usually limited in coverage);
9. Accidental damage for certain items such as fixed glass;
10. Legal liability arising out of ownership or occupation of the dwelling.

Your policy may include some additional benefits such as:

1. Extra cost of reinstatement;
2. Architect and other fees;
3. Removal of debris from the land;
4. Loss of rent;
5. Temporary accommodation;
6. Breakdown of whole household electrical motors;
7. Deterioration of refrigerated foods;
8. Limited cover for contents temporarily removed from the insured dwelling;
9. Limited cover for contents on the land at the insured dwelling but in the open air;

Finally, the Australian insurance market typically excludes things such as:

1. Flood;
2. Depreciation;
3. Wear, tear, rust or corrosion;
4. The action of insects or vermin;
5. Loss or damage resulting from war or war like activities, nuclear material;

A number of conditions, such as to take reasonable precautions to prevent loss or damage, will apply. In addition, it is usual for an excess to apply as a measure to prevent numerous low value claims and to reduce premiums on policies generally.


4.3 Personal property / tools of trade

Many insurers provide coverage for specified items such as jewellery, musical instruments and so on against accidental loss or damage. In addition, tradespersons may have either specified items or tools of trade generally insured for accidental damage, anywhere in Australia.


4.4 Pleasure (water) craft

Smaller privately owned water craft are often insured as part of the insurer's personal lines business. These policies usually bear close resemblance private motor vehicle policies, as adapted to certain marine hull policies of insurance.