Tell us your insurance stories

Yes, this surely must be clarified.

Given some of the questions that I got at the start of the pandemic about safety at home, it is possible that the employer was implicitly extending their business insurance to the homes of the employees. For example, I was asked to ensure that all IT equipment at home was on powerboards with suitable surge and overload protection (whereas in the X years before the pandemic no-one had ever given a crap about that).

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It is an increased risk for a number of reasons. This is especially the case if one has anyone associated with the business visiting the home address or…if one makes, prepares or provides services (such as cooking, repairing something etc) and the service causes an injury or death. In such case, the H&C insurer becomes party to any claim as the activity occurred at the home address (which is the property containing the home). It becomes more complicated if one also has separate business type insurance as well as both the H&C insurer and the business insurer become party to the claim. This is only likely to be resolved in a very expensive court case, where the court will determine responsibilities of both insurers. This is why our broker has indicated to us that H&C insurers won’t include business activities in H&C policies - it creates uncertainty in relation to liabilities and responsibilities.

The reduction in risk from being at home is minor and will only potentially reduce risk against things like burglary. The costs associated with a burglary are minor (could be thousands) compared to the costs of an injury (which could run into $100s thousands or millions).

It is unlikely that there will be any domestic insurer which allows running a business from home (noting that working from home when employed elsewhere is very different to running your own business from home).

Two years ago we checked the main retail insurers for H&C insurance and none provided cover for business run from home. It could have changed in the past 2 years, but is unlikely based on advice from our broker. We even struggle today as some underwriters asked for quotes by our broker won’t insure businesses like our own.

Choice possibly should look at what type of non-domestic activities can be carried out from a home covered with H&C insurance - without impacting on the H&C insurance. These could include things like:

  • cooking or growing plants for school/church/community fetes
  • selling odd second hand items (such as on Gumtree, eBay or Marketplace)
  • doing odd jobs for friends and family (such as repairing a bike, support for a smart device)

Whether Choice does is another issue, as each insurer and their underwriter would also need to also agree with the list. I suppose this is why H&C insurers require policyholders to contact them when a business or change in activities occur at the insured address so that they can assess risks and impact on their own cover.

But is is unlikely that running a business from home will be included on the list.

On one hand I welcome that businesses run from home be also included in H&C insurance. If they were, we would could save many thousands on our existing insurance policies. But on the other hand, I am concerned if they are automatically included by changes in law, as this will increase insurance premiums for all consumers that have H&C insurance…as the increase risk to the insurer will be passed onto all consumers through significantly higher premiums.

I personally believe that it should be a user pay type system…those who chose to carry our a business from the home finds and pays for the the cover to allow this to occur. This prevents those who can least afford insurance, paying for something that they don’t need or require.

It has been resolved and covered recently by the ABC:

It is however worth noting that one’s workplace insurance may extend to employees working from home. When I worked from home from time to time (when I was an employee), our WPH&S officer was required to visit the home and assess it’s suitability for use (this is a similar example I found online). This was to ensure that it met the obligations of the employers business insurance cover (safe and healthy place to work). I suspect that due to Covid, the number of and also contact restrictions may have prevented such assessments where insurance indicates such is required.


Another example would be damage from fire. If a fire breaks out (e.g. from an electrical fault or e.g. less likely a lightning strike) and you are at home then you may be able to extinguish it and/or summon help far sooner - thereby reducing the total damage bill. If no-one summons help then the buildings and contents may be a total write-off, amounting easily to hundreds of thousands of dollars in a claim.


My past employer went further. If working from home the same OH&S standards in the office had to apply to the home office. Desk height, chair, wrist support, screen height, etc.


Could do, but if one can’t get out…then the costs could be significant if there is death or injury (and may be significantly more than the cost of property damage caused by the fire).

I suppose the same could apply to to a home invasion…where someone disturbs an intruder and comes off second best.


Yes, the powerboard was meant to be just one example. I was provided with an office chair from the office (it’s not like anyone was in the office to use the chair, at the peak of the pandemic anyway).


Maybe tangential or relevant for one aspect. Is working from home carrying on a business? Does the employers insurance cover one while working at home? Sometimes? Always?


(It’s a question of comparing the increased risk with the decreased risk.)

On the issue of “can’t get out” though … if the net effect is increased risk, by that logic someone who is unemployed, bumming around at home, should be charged more for insurance than someone who is a 9-5 wage slave in an office somewhere. Actuarily that could make sense. Politically that might be unsaleable. :slight_smile:

Anecdotally, the risk of being unable to get out relates to two things:

  1. Lack of (working) smoke detectors
  2. Being asleep

Working from home may not be subject to the second risk. :wink:

There’s no substitute for having working smoke detectors!

But, overall, the fact that insurers do offer a discount for retirees etc. at home, suggests that the balance of risk is in favour of being at home, despite the small extra risk of dying.


Recently we had our home insurance renewal sent to us from Allianz. The premium last year was $1,900. This year it is $27,500. The letter was just a normal renewal letter advising us of the various ways to pay, getting a a new mortgage was not one of them!! The under writer was contacted and their claim was that they had reviewed the flood risk and we went from lowest to highest risk. Our local area had new drainage installed some 30 years ago and there has never been a flood or water over the road, even in the recent heavy rain period. We cancelled our flood cover and the premium is now back to last years level. Our logic is that we believe there is minimal risk of flood therefore why insure for it. Why are the underwriters getting it so wrong? I was told that I could propose a change the rating if it was backed by the Council, why am I doing their work.??



I live in Ballina. Many people in our shire suffered significant flood damage in March 2022. Many are still homeless, and Lismore is but a shell of what it once was.
Our house is in a relatively new estate which had some serious council imposed conditions on slab level heights relative to AHD, or, “Australian Height Datum”. The purpose of the development condition was to “flood proof” us for at least the next 100 years. As a result, none of the hundreds of houses in our estate suffered any damage at all.

It seems that the insurance companies could not care less. All that they care about is our postcode. I was insured with Westpac. My latest renewal notice had newly introduce “flood cover” at some $2700 and about $4,000 all up. This is probably peanuts compared to what many others must pay as a condition of their mortgages. I asked Westpac if I could opt out of the flood cover and they said no. So I looked around…

Amounts for compulsory flood cover ranged from $2,700 up to over $30,000.

Good old NRMA (you know, beautiful TV adds about koala habitats etc…) quoted me $34,000, for ONE year!. This was at least FOUR TIMES greater than any other insurer. NRMA also decided that the replacement value of my house was TWICE as much as I needed in replacement value - I KNOW what it would cost to rebuild my house… ditto for contents. I had no opportunity to indicate how much I wanted to insure for… GIO, APIA etc all had more reasonable(?) rates but all also demanded compulsory flood cover. It is my business if I do or don’t want flood cover.

I thought that the insurers had access to infinite data with which to set premiums. The massive spread indicates to me that their “actuaries” arbitrarily create their premiums based on what they think that you can pay. Absolutely no consistency, or, credibility.

I only know of one home owner in my estate that has taken flood cover. The rest of us have confidence that the council got it right, and have opted out.

I only found one insurer that allowed opting out, and that is ALLIANZ. Well done Allianz! you are now my insurer. To NRMA , SHAME ON YOU.

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There are other possibilities such as they are using different data sets, different assumptions or they just don’t want your business at all.

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If you mean the development was designed based on an ARI (annual reoccurrence interval) of 1 or 1%, this doesn’t mean it has been designed to flood proof for the next 100 years.

ARIs or AEPs are probabilities. An ARI of 1 means each year there is a probability that the flood level will exceed the design level of 1% in any year. The same probabilities exist year on year, irrespective of what happened the previous year. It is possible that two ARI 1 events can occur one year or the next, or after a few years. In wetter climate cycles like that which has occurred recently and predicted for this summer, ARI of 1 could be exceeded a number of times.

Unfortunately there is misconception that an ARI of 1 means a flood will only occur once in 100 years.

Insurance companies know this and will price risk into their insurance premiums.


to phb:
I’ll take your word for it!

to syncretic:
Probably different data sets. Maybe different assumptions. They still need to work on their modelling. I has a discussion with NRMA earlier today, following their email asking “how did I like the quote?” Eventually got a reasonable replacement value for home and contents, AND, No FLOOD cover. Down from $34000 to $2650, however, Storm cover only available with flood cover. I have been with NRMA for well over 50 years. Bye bye NRMA!

note that AAMI, GIO etc all seemed to be around the $9K mark.

Might I suggest that choice does an expose on this sort of practice?

Not my word, but BOM and engineering terminologies…

The last reference states:

Previous terminology using Average Recurrence Interval (ARI), such as in ‘1-in-100-year event’, is now discouraged as it suggests an elapsed time between each event. For example, after hearing that a location had experienced a 1-in-100-year event, you might be forgiven for thinking, ‘I won’t live to see another one of those in my lifetime’. However, statistics show there is a 26 per cent chance that a 1-in-100-year event could occur during a 30-year timeframe.


As an update to my last post. GIO have advised they will cover flood in our local area, charge will be $3,000. So some insurers get it right. Seems to be a lot of variability in under writer assessments and data sets. The challenge for assessors is to ensure risk is accurately assessed to drive max profitability for the Insurer…must try harder !!!

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Ex-insurance sales here. These problems are likely to become more pronounced as the risk of severe disasters increase.

Typically, insurers assess risk by looking at the likelihood of an event occurring, as well as the likely damage that could occur. Things like ‘alarm discounts’ have been around for ages to account for how your house design and fittings could minimise both risks. There has never really been any need for insurers to go into details for how an individual house could be more resistant to flood or fire than its neighbours, as these features were rarely present and these events were so infrequent.

This is rapidly changing, and it will likely take insurers some time to get data. Let’s go back to our two risks, the likelihood of a claim and the likely size of a claim. Although it’s easy for us to say ‘oh my house is raised so that reduces the risk,’ actually converting that to values for those two risks and ensuring it can be calculated for any property is a mammoth task.

So what does it mean for the consumer? Well if your house has mitigating features the first step is to shop around and see if any insurers already consider that. Do they assess your individual address, or just suburb? What questions do they ask? Do you get to specify your cost to rebuild or is it presumed the insurer can accurately calculate that from your answers?

For those who’s individual building might be HIGHER risk than it’s neighbours, things will only get harder. Whilst it’s great if insurers start to ask more questions to give a fairer premium, those who are subsequently identified as lacking mitigating features are going to wear the cost. I would argue these demographics are those least likely to be able to wear the cost as they are likely to be in older buildings, and can’t afford to move or renovate.

Unfortunately, the insurance industry, government and consumer organisations are all unable to come up with any easy answers for how to balance this.


Important to consider also that they may have concerns that their data set (history of claims) is out of date. Let’s say that the climate is changing but we don’t know how far and how fast, but we think that a higher frequency of extreme weather events will occur in the future … then the risk also has to include some unknowns i.e. allowance for how wrong they might be in their estimation.

A couple of points though:

  • you have to allow for the cost of demolishing and disposing of the old house
  • in a mass claims event, there will be a shortage of builders and building materials - so that the cost is higher than it would otherwise be (hence if you insist on the normal rebuilding cost, that could put you at the back of the queue and it will take more years before you have a replacement house)