Defence Service Homes Insurance Scheme (Statement of Conditions) Variation 2019

The Schedule crystallises several core insurance concepts and operational rules. These are the primary legal and contractual constructs that determine coverage and the mechanics of claim settlement.

• Insured events and scope: Part 1 identifies thirteen named events that constitute covered perils for “loss or damage to the home”, including fire (bushfire included), explosion, lightning, earthquake, flood or action of the sea, storm, rain, acts intended to cause loss, theft, escape of liquid, riot, impact, and falling trees or branches. Coverage requires that the event occurs during the period of insurance and is not excluded by Part 7 General Exclusions or any specific exclusion on the certificate (Part 1 opening paragraphs; Part 1 events).

• Conditional indemnity and exclusions: The policy limits coverage where damage is due to gradual processes, defective design, failure to maintain, or wear and tear (Part 7 General Exclusions). For example, rain damage is excluded where water enters because of structural defects, poor maintenance, or openings made for renovations (Part 1 Rain What we do not insure you for). Several other exclusions are expressed as conditional denials of cover, such as deliberate acts by persons living in the home (Part 1 Act intended to cause loss or damage and Theft What we do not insure you for).

• Excess and event aggregation: For earthquake, an “earthquake event” is defined as the first quake and the following 48 hours; a $200 excess applies to each such event where the insurer agrees to pay (Part 1 Earthquake). For accidental loss or damage in Part 2, there is a $100 excess for types of accidental damage other than specified fixed items where no excess applies; and Part 2 imposes a $5,000 cap per accidental damage claim.

• Limits and sum insured: The base cap for any one claim under Part 1 is the sum insured. Additional expenses (temporary accommodation, lost rent, landlord’s fixtures and fittings, extra building costs, legal costs for mortgage discharge, matching décor and trees/shrubs/plants) are insured but collectively capped at 20% of the sum insured per claim (Part 1 B and Limits on what we pay). Specific sub-limits exist within that 20% cap, for example $10,000 or 10% of the sum insured for landlord’s fixtures and fittings, $1,000 for legal costs to discharge mortgages, $500 for matching decor, and specified caps for trees and plants.

• Repair, rebuild or cash choice: Where a claim is accepted, the insurer may choose to pay cash based on its estimate of reasonable repair/rebuild costs, pay the reasonable actual costs incurred by the insured in repairing, or pay the reasonable costs actually incurred in rebuilding (Part 1 A What we pay). The insurer will pay “new for old” to a condition substantially the same as when new, subject to depreciation if the home was not kept in good repair.

• Conditional reimbursement and prior approval: The insurer will only pay costs of obtaining quotes or inspection reports if the insurer agrees to do so before they are obtained (repeated in Parts 1, 2 and 3). Several payments are conditional on the insured actually incurring the costs before they qualify to claim those amounts (matching decor, trees/shrubs/plants).

• Additional automatic cover modules: The Schedule supplies automatic cover modules included in the sum insured, such as Accidental Loss or Damage (Part 2), Fusion of electrical motors (Part 3), Owner’s or Occupier’s Legal Liability (Part 4), and limited strata title home cover (Part 5). Each module has its own covered causes, exclusions and monetary limits.

• Definitions anchor operational meaning: Part 8 contains definitions that shape coverage, notably definitions of “home”, “site”, “flood”, “family”, “excess”, “sum insured”, “certificate”, “period of insurance” and “act of terrorism”. These definitions materially affect coverage,for example, the “home” definition includes domestic appliances and certain fixed items but excludes parts used for business and excludes carpets as floor coverings (Part 8).

• Interaction with statutory or third-party obligations: The policy covers reasonable costs of complying with statutory authority requirements served after a loss when they are necessary for repair or rebuild (Part 1 F). The policy also contemplates mortgage discharge costs where the home is destroyed and certain options are chosen (Part 1 G), and conditions owner’s liability cover on workers’ compensation being the primary source where relevant (Part 4 What we do not insure you for).

These concepts structure claim outcomes. The policy balances scope (named perils plus accidental damage, fusion cover and liability) against exclusions for maintenance failures and gradual deterioration, quantifies insured exposure via a sum insured plus sub-limits, and imposes procedural controls such as requiring insurer agreement before obtaining quotes and limiting reimbursement to costs actually incurred. The Statement of Conditions is therefore a conventional property-insurance contract drafted into the statutory framework of the Defence Service Homes Insurance Scheme.

Primary affected persons and entities are clearly identified in the Schedule text and surrounding instrument provisions.

• Insured persons: The immediate class affected are persons who hold policies under the Defence Service Homes Insurance Scheme as governed by Part VI of the Defence Service Homes Act 1918. The Schedule repeatedly frames coverage in relation to “you” and “your family” and refers to the certificate as showing the period and sums insured (Part 8 Definitions certificate, period of insurance, and sum insured).

• Families and household members: Definitions extend insured protections and exclusions to “family” which includes spouse or de facto partner, parents, grandparents, children, grandchildren, sons or daughters-in-law, and siblings (Part 8 ‘family’). Certain exclusions hinge on whether the relevant actor is a person who “lives in the home” or is present with the consent of a resident (for example, Act intended to cause loss or damage and Theft exclusions).

• Owners/occupiers and landlords: The policy distinguishes between owner-occupiers and landlords. For example, landlord’s fixtures and fittings are specifically insured (Part 1 E), and lost rent is payable where the insured is leasing the home at the time of loss (Part 1 D). Strata title owners have special interaction rules with Body Corporate insurance (Part 5).

• Body Corporates and other insurers: Strata title arrangements are affected. Part 5 requires that the policy will only pay where the Body Corporate has not sufficiently insured the loss and only after the insured attempts to recover from the Body Corporate’s insurer or any other insurer. Thus, Body Corporate insurers may be the primary payer in many strata scenarios.

• Mortgagees: The policy contemplates mortgage discharge costs if the home is destroyed and the insured elects to rebuild on another site or is paid market value (Part 1 G). The insurer’s willingness to discharge mortgages in those circumstances affects mortgagees and owners.

• Claimants and third parties: Part 4 Owner’s or Occupier’s Legal Liability insures the insured’s legal obligation to pay compensation for bodily injury or property damage to third parties that occurs at the home or site. The policy also addresses legal fees for plaintiffs if a court orders the insured to pay them.

• Service providers and trades: Service providers will be affected operationally by procedural requirements in the policy. For example, the insurer will only pay for costs of quotes or inspection reports if the insurer agrees in advance (Parts 1, 2, 3). Where the insured reclaims costs (matching decor, trees), the insured must actually incur the costs before claiming.

• The insurer and scheme administrators: The Schedule confers powers and discretions on the insurer, including the ability to choose settlement mechanisms (repair, rebuild, cash) and determine reasonable costs. The instrument itself is made under s 38A of the Defence Service Homes Act 1918, which places the power to vary the Statement of Conditions in the Minister. Therefore administrators and the Department responsible for the scheme are affected operationally and legally by the Statement’s terms and by the statutory constraints noted in the Saving clause.

Who pays and who decides, concretely:

• The insureds pay premiums and any applicable excess. Excess amounts are defined in the policy (Part 8 ‘excess’) and applied in particular scenarios (Part 1 earthquake $200 per event; Part 2 $100 for accidental claims other than certain fixed items where no excess applies).

• The insurer decides entitlement and payment mechanics. The policy repeatedly states “If we agree to pay your claim…” and “we may choose to…” indicating insurer decision-making power over acceptance and settlement method (Parts 1, 2, 3, 4).

• Third-party insurers and Body Corporate insurers may be primary payers in some circumstances (Part 5), shifting immediate payment obligations away from the scheme.

• Courts or statutory authorities may determine legal liabilities and award legal costs; the policy deals with reimbursement where a court orders the insured to pay a claimant’s legal fees (Part 4 What we pay and Limits on what we pay).

The Schedule creates specific duties for insureds and corresponding rights for both insurer and insured. These obligations and entitlements determine claimability, settlement, and limits.

Insured duties (selected and grounded in text)

• Keep the home in good repair and condition. The insurer will only pay the reasonable costs of repair or rebuilding if “the home has been kept in good repair and condition” (Part 1 A What we pay). If not, the insurer will “reassess the value of the home before we work out the costs we will pay you” by decreasing value for age and deterioration.

• Commence repair or rebuilding within six months of the loss. If repair/rebuild is not started within six months and delay increases costs, the insured must pay the amount of that increase (Part 1 A What we pay).

• Attempt to recover from other insurers or the Body Corporate before claiming under the policy for strata title homes. Part 5 requires the insured “try to recover the amount of your claim from any other insurer who may have insured the loss or damage, before you claim from us.”

• Obtain insurer consent before incurring quote or inspection costs if reimbursement is sought. The insurer will only pay costs of getting quotes or inspection reports if “we agree to do so before you get them” (repeated in several Parts).

• Pay applicable excesses. The insured must pay the excess amount that applies to a claim before insurer payment is made. For example, earthquake events require the insured to pay the first $200 of each claim agreed to by the insurer (Part 1 Earthquake). For accidental loss or damage, there is generally a $100 excess for non-exempt items (Part 2 Limits on what we pay).

• Actual incurrence of certain costs before entitlement to claim. For matching decor and replacement of trees/shrubs/plants, the insured must “actually incur the costs” before qualifying to claim (Part 1 H and I).

Insurer rights and duties (selected)

• Discretion to choose repair, rebuild or cash settlement. The insurer “may choose to” pay a cash amount based on its estimate, or pay the reasonable costs actually incurred in repair or rebuild (Part 1 A What we pay).

• Pay on a ‘new for old’ basis subject to condition. The insurer will pay reasonable costs of repair/rebuilding on a ‘new for old’ basis to a condition substantially the same as when new, but not better than when new (Part 1 A What we pay). However, this is conditional on good repair status.

• Apply limits and sub-limits. The insurer will not pay more than the sum insured for any one claim under Part 1 and applies the 20% cap for the listed additional expenses, with specific sub-limits for particular items (Part 1 Limits on what we pay).

• Limit or deny payment under specified exclusions. The insurer will not insure losses caused by wear and tear, rust, corrosion, defects in structure, failure to keep in good repair, acts of terrorism as defined, war, nuclear incidents and other enumerated exclusions (Part 7 General Exclusions and Part 8’s act of terrorism definition).

• Pay reasonable costs of locating the source of escaped liquid where claim accepted for escape of liquid (Part 1 Escape of liquid What we insure you for).

• Pay legal costs in certain circumstances and pay compensation amounts up to the Part 4 sum insured for owner’s liability. The insurer will pay compensation amounts and reasonable legal fees if agreed in writing beforehand, and will pay legal fees of a claimant if a court orders the insured to pay them (Part 4 What we pay and Limits on what we pay).

Procedural rights and limits

• The insurer’s payment obligations are framed as conditional on its agreement that a claim is payable (“If we agree to pay your claim…” occurs throughout), giving the insurer procedural power to accept, reject or limit claims.

• For strata claims the insurer’s payment is subrogated by recoveries from Body Corporate insurers or other insurers: the insurer pays the lower of the sum insured or the Part 1 amount minus recoverable amounts (Part 5 What we pay).

• In death claims (Part 6), the insurer requires proof of death cause via a death certificate from a registered medical practitioner and caps payments for death and funeral expenses ($10,000 per death up to $40,000 total; $2,500 per funeral up to $10,000 total).

Key contractual consequences

• Failure to maintain the home or delay can reduce entitlements, because the insurer will reassess value and the insured bears cost increases caused by delay (Part 1 A).

• Where the insured chooses to rebuild on another site, the insured bears any increased costs arising from site change (Part 1 A and F).

• Exclusions based on actors (residents, consenting visitors) affect whether intentional acts or thefts are covered. For example, theft by someone living in or present with the consent of a resident is excluded (Part 1 Theft What we do not insure you for).

The instrument itself sets contractual remedies and payment rights rather than criminal penalties. It operates as the governing Statement of Conditions for insurance coverage under Part VI of the Defence Service Homes Act 1918. Enforcement in practice is therefore exercised through civil contract and claims-administration mechanisms rather than statutory fines or criminal sanctions within the instrument text.

Mechanisms that function as enforcement or sanction

• Acceptance or rejection of claims: The insurer enforces entitlements by determining whether to “agree to pay” a claim. The repeated phrase “If we agree to pay your claim” signals that the insurer’s assessment controls whether payment flows. That determination is the primary enforcement mechanism.

• Reduction of payment for lack of maintenance: The insurer has explicit contractual sanction where the home has not been kept in good repair. The insurer will reassess and decrease the value used to calculate payment “taking into account its age and the extent it has deteriorated” (Part 1 A). That reduces the insured’s recovery for deficient maintenance.

• Excess application and cost-sharing: The insured is contractually obliged to contribute specified excesses (earthquake $200 per event; accidental other than certain fixed items $100) which reduce insurer payment and thereby enforce cost-sharing (Part 1 Earthquake; Part 2 Limits on what we pay).

• Non-payment for excluded causes: General exclusions in Part 7 (for example, wear and tear, rust, corrosion, nuclear incidents, acts of terrorism as defined, warlike activities, defects in structure or materials, failure to maintain etc.) are express contractual grounds for non-payment.

• Procedural pre-conditions to reimbursement: The insurer will only pay some categories of costs if the insured follows certain procedures (e.g., obtaining insurer agreement before incurring quotes or inspection costs). Failure to comply can result in the insurer refusing to reimburse those costs.

• Subrogation and priority in strata claims: For strata-title homes, the insured must seek recovery from the Body Corporate’s insurer and other insurers before claiming under this policy (Part 5). The insurer’s payment is reduced by the amount recoverable from those other insurers, which enforces external insurer priority.

• Court-ordered obligations: Where a court orders the insured to pay a claimant’s legal costs, the policy provides that the insurer will pay those legal costs (Part 4 What we pay and Limits on what we pay). Thus enforcement of third-party legal rights is realised through court processes, with the insurer liable for costs when the court orders it.

Absence of statutory penalty provisions in the instrument

• The instrument does not create criminal offences or administrative fines. It does not establish an appeal procedure or internal review process within the statement itself. Remedies and enforcement therefore should be sought through ordinary contractual dispute resolution, statutory rights under the Defence Service Homes Act 1918 (the instrument is made under s 38A), and through general civil courts. The instrument contains a Saving provision that protects pre-existing entitlements to payments that had accrued before the instrument’s commencement (5 Saving), which functions as a protective legal constraint rather than a sanction.

Implementation and administrative enforcement risk

• The insurer’s broad discretion to decide whether to repair, rebuild or pay cash, and to agree whether to reimburse inspection quotes, gives administrators significant practical gatekeeping power over payments. This concentrates implementation risk in the claims-assessment function.

• The instrument’s conditional duties, such as the good repair requirement and the need to commence rebuilding within six months, require administrative monitoring and may give rise to disputes about causation, depreciation and the measurement of reasonable costs. The policy therefore creates a potential for contested claims and litigation over insurer decisions, but the instrument itself does not specify internal appeal or dispute-resolution steps.

The Statement embeds and references other legal instruments and relationships and thereby interacts with other legal obligations, regulatory standards and third-party insurance arrangements.

Interaction points explicit in the Schedule

• Defence Service Homes Act 1918, Part VI and section 38A: The instrument is made under s 38A of the Defence Service Homes Act 1918 (Authority). The Saving note explicitly references subsection 38A(4), which provides that the Minister must not vary the Statement of Conditions so as to remove entitlements to payments that arose before the variation. Therefore the instrument operates as statutorily authorised contract terms for the Defence Service Homes Insurance Scheme (Authority; 5 Saving).

• Statutory authority requirements and compliance: Part 1 F includes cover for “complying with the requirements of any Statutory Authority that are served on you after the loss or damage happens,” if the insurer agrees those costs are necessary to repair or rebuild. This provision ties insurer obligations to external compliance orders and statutory building or safety requirements.

• Mortgages and discharge: Part 1 G provides that if the home is destroyed and the insured either rebuilds elsewhere or is paid market value, the insurer will pay legal costs for the discharge of any mortgage on the home, subject to a $1,000 cap per period of insurance. This interacts with mortgage law and creditors’ interests by addressing costs of clearing encumbrances.

• Body Corporate/Strata insurance: Part 5 stipulates that for strata title homes, the policy will only pay where the Body Corporate has not or has not sufficiently insured the loss, and only after the insured has attempted recovery from the Body Corporate’s insurer or other insurers. That provision directly interacts with strata law and Body Corporate insurance practices, assigning primary responsibility to Body Corporate insurer where applicable.

• Workers’ compensation and employer responsibilities: Part 4 What we do not insure you for excludes legal liability that is or should have been covered by compulsory workers’ compensation insurance. This aligns the policy with statutory workers’ compensation regimes by excluding duplicative liability exposures.

• Safety laws and equipment standards: Part 4 excludes liability arising from equipment containing liquid petroleum gas that does not comply with relevant safety laws. This creates a direct compliance cross-link to gas safety and appliance regulation.

• Pool fencing legal standards: Part 4 excludes liability in relation to a swimming pool that is not fenced to legal standards or has fencing that is not properly repaired or maintained. This cross-references and reinforces statutory pool-fencing obligations (for example, state regulatory schemes that require prescribed pool fencing standards).

• Building work insurance thresholds: Owner’s liability Part 4 excludes liability arising from building work being carried out on the home or site that costs $30,000 or more. This interacts with statutory regimes that require certain insurance or licensing for larger building projects and may signal the insurer expects separate construction-related cover.

• Terrorism, nuclear and public health incidents: Part 7 excludes losses from acts of terrorism as defined, and Part 8 defines “act of terrorism” in a way that references nuclear, radioactive release and contamination or bio-contaminant events that render a building uninhabitable. The policy thus interacts with national emergency and public health law insofar as such events may trigger extraordinary governmental responses and affect insurability.

Practical legal interface consequences

• Priority of cover: The policy places Body Corporate and other insurers ahead of scheme payments in strata contexts and excludes coverage that statutory schemes (workers’ compensation) are intended to cover. Insureds must therefore coordinate claims across insurers and statutory entitlements.

• Proof and statutory documents: For death claims (Part 6), the policy requires a death certificate from a registered medical practitioner showing cause of death. This introduces interaction with the legal regimes regulating death certification and coronial processes.

• Mortgagees and secured interests: Legal costs to discharge mortgages affect creditors and may require the insurer and insured to obtain legal clearance documents, creating interplay with property law conveyancing procedures.

• Regulatory compliance as a condition: The policy will pay statutory-authority compliance costs that are necessary to repair or rebuild, but only with insurer agreement, creating an administrative interface to regulatory requirements.

Limitations on interaction claims

• The instrument does not itself alter statutory schemes; it defines contractual coverage in ways that reference those statutory schemes. It does not remove a statutory creditor’s rights nor rewrite workers’ compensation obligations. It integrates with those regimes by prescribing contractual outcomes that depend on the legal status of events and third-party responsibilities.

The instrument explicitly records limited amendment history within its opening clauses.

• Revocation of Variation 2016: Clause 4 revokes the Defence Service Homes Insurance Scheme (Statement of Conditions) Variation 2016 (F2016L00553). The effect is that the 2016 variation no longer forms part of the operative Statement of Conditions once this instrument commences.

• Saving of accrued rights: Clause 5 contains a Saving provision that preserves rights to payments that had accrued before the instrument’s commencement. If a person immediately before commencement had a right to a payment under the prior Statement of Conditions and the payment had not been made, that right continues until payment is made. The instrument’s Note points to subsection 38A(4) of the Defence Service Homes Act 1918, which places a statutory limit on the Minister’s power to vary the Statement of Conditions so as to remove pre-existing entitlements.

• New Statement of Conditions operative: Clause 6 states that on and after the instrument’s commencement, the new Statement of Conditions set out in the Schedule applies for the purposes of Part VI of the Defence Service Homes Act 1918. That is the operative change: the Schedule replaces the previous Statement of Conditions.

Absence of a long amendment trail in the instrument

• The text provided is a single amending instrument (revocation plus replacement Statement) and does not list prior amendments beyond revoking the 2016 variation. The instrument therefore functions as a consolidated replacement rather than a series of incremental amendments. Any prior history (for example, earlier Statements or variations) is not recited in the Schedule.

Implications for users and administrators

• Because of the Saving clause, administrative practice must recognise and honour payment rights that accrued before the new Statement’s commencement. Administrators must check whether a claim right arose under the prior Statement and, if so, allow it to run under the prior entitlement until paid.

• The replacement Schedule will be the governing text for new claims and for those claims that arise after commencement. Administrators and service providers should ensure policy certificates, renewal notices and communications reflect the new Statement of Conditions and that training and claims processes are aligned with the new terms.

The instrument as provided contains no litigation history, case citations, or reported disputes. It does not name or refer to any judicial decisions. The Schedule is a contract-like document and its text contains no mention of judicial interpretation or past litigation outcomes.

What that absence means for legal risk and likely disputes

• Potential areas for dispute are visible from the document’s contents even though no litigation is recorded in the instrument. Common dispute flashpoints in property-insurance contracts that are present here include:

  • Whether a loss falls within an insured event or is excluded by Part 7 (for example, gradual deterioration, defects in structure, or failure to keep the home in good repair).
  • The insurer’s assessment of “reasonable costs” for repair or rebuild and whether “new for old” applies or should be reduced for age or deterioration.
  • Interpretation of the “earthquake event” aggregation rule and the application of the $200 excess per event.
  • Whether the insured satisfied the procedural conditions (for example, attempting recovery from Body Corporate insurers, obtaining insurer agreement for quotes, starting rebuilding within six months).
  • Whether an act was “intended to cause loss or damage” by someone living in or present with the consent of a resident, which could determine coverage for intentional acts or thefts.

• While the instrument itself does not document litigation, those typical categories of dispute are built into the contract language and therefore constitute plausible loci for future litigation or administrative review, unless alternative dispute resolution mechanisms are used.

No procedural or appeal provisions in the Schedule

• The Schedule does not set out an internal review or appeal process for disputing an insurer’s decision. It also does not specify that disputes will be managed through a particular tribunal or ADR process. Parties disputing claims would therefore rely on general avenues: insurer internal complaints procedures (if any), external ombudsmen or tribunals under applicable jurisdictional frameworks, and litigation in courts, subject to statutory jurisdictional limits and applicable law.

Advice for researchers seeking litigation history

• Because the instrument does not list cases, researchers seeking litigation developments must search external legal databases and administrative tribunal determinations for disputes involving the Defence Service Homes Insurance Scheme or the particular Statement of Conditions. The instrument itself provides no direct pointer to such materials.

The Schedule contains many specific limits, exclusions and procedural traps that can materially reduce or extinguish recoveries if not navigated carefully. These are practical “gotchas” that practitioners, insureds and administrators should note and act on.

Maintenance and depreciation conditions

• The insurer will only pay repair or rebuild costs if “the home has been kept in good repair and condition.” If not, the insurer will reassess value by decreasing for age and deterioration and pay on that basis (Part 1 A). This is a common source of dispute. Avoid assuming “new for old” applies unconditionally; evidence of maintenance history and pre-loss condition will be critical.

Time limits and commencement of works

• If the insured does not start repairing or rebuilding within six months of the loss and the delay increases costs, the insured bears those additional costs (Part 1 A). Failing to commence works in a timely way can reduce the insurer’s obligation.

Pre-approval for inspection/quote costs

• The insurer will only pay costs of getting quotes or inspection reports “if we agree to do so before you get them” (repeated in Parts 1, 2 and 3). Incurring such costs without documented insurer agreement risks non-reimbursement.

Strata priority and recovery requirement

• For strata title homes, the insured must try to recover from the Body Corporate’s insurer or any other insurer before claiming under this policy (Part 5). If you do not pursue those avenues or fail to establish insufficiency of Body Corporate cover, your claim under this policy may be reduced or refused.

Accidental damage caps and excess distinctions

• Accidental loss or damage claims are capped at $5,000 per claim (Part 2 Limits on what we pay). There is generally a $100 excess for accidental damage other than fixed items (Part 2), whereas certain fixed items (glass, mirrors, baths, sinks, toilets and cisterns) have no excess. Misunderstanding which items attract an excess may lead to unexpected out-of-pocket costs.

Matching decor and tree replacement timing

• For matching decor and tree/shrub/plant replacement, the insured must actually incur the costs before qualifying to claim (Part 1 H and I). Claiming before incurring costs will not meet the policy condition.

Sub-limits and aggregated caps

• Additional expenses (temporary accommodation, lost rent, landlord’s fixtures and fittings, extra building costs, legal costs for discharge of mortgage, matching decor, and trees/shrubs/plants) are collectively capped at 20% of the sum insured per claim (Part 1 B and Limits on what we pay). Within that 20% there are further sub-limits. Insureds should not assume these are unlimited.

Definitions that narrow cover

• The definition of “home” excludes parts used for business, manufacturing or trade purposes, and excludes carpets among floor coverings (Part 8 ‘home’). Damage to business areas or carpets may therefore be excluded from the home cover. Check the certificate for any specific inclusions.

Owner’s liability exclusions and building works

• Owner’s liability excludes liability where compulsory workers’ compensation should apply and excludes liability arising from building work costing $30,000 or more (Part 4 What we do not insure you for). If you are undertaking significant renovations, separate construction insurance will likely be required.

Terrorism and nuclear definitions

• Part 7 excludes “any act of terrorism” as defined in Part 8. The instrument’s definition includes nuclear detonation and release of radioactive matter and covers contamination or contagion scenarios that render a building uninhabitable. These definitions can be narrower or broader than statutory terrorism definitions and affect insurability around such events.

Death and funeral payment caps

• Death benefits are limited to $10,000 per death up to $40,000 overall per period of insurance; funeral expenses are capped at $2,500 per funeral up to $10,000 overall per period of insurance (Part 6 Limits on what we pay). These limits are modest and may not meet expectations.

Requirement to prove cause of death

• Death claims require a death certificate given by a registered medical practitioner showing cause of death (Part 6 What we insure you for). Absence of suitable medical evidence risks claim rejection.

Liquid escape and repair exclusions

• Escape of liquid cover pays to locate the source and for sudden bursts or overflows from fixed pipes/tanks/gutter systems but excludes gradual seepage and excludes cost of repairing the defective item itself or leaking shower bases and walls (Part 1 Escape of liquid What we do not insure you for). Policyholders should avoid assuming plumbing repairs are covered.

Market value option and mortgage consequences

• If the insurer and insured agree that rebuilding is not appropriate, the insurer will pay the market value before destruction less the amount it costs the insurer to pay off any mortgage on the home (Part 1 A). That creates an interaction with mortgagees, and insureds should understand the mortgage discharge process.

Procedural uncertainty and insurer discretion

• The insurer’s broad discretion to choose settlement mechanism and to determine what is “reasonable” increases litigation and administration risk. Documentary evidence and clear pre-approval requests will be important.

Practical compliance steps for insureds, administrators and advisers, grounded in the instrument’s text.

1. Verify the certificate and sums insured

• Confirm the current Certificate of Insurance or Building Renewal Notice. The Schedule repeatedly references the certificate as showing period of insurance and sums insured (Part 8). Ensure the certificate reflects the correct site, sum insured for each Part, and any special exclusions or endorsements.

2. Maintain the home in good repair

• Keep contemporaneous records of maintenance and repairs. The insurer conditions payment for repair/rebuild on the home being “kept in good repair and condition” and will reduce value for deterioration if it was not (Part 1 A). Photographs, invoices and maintenance logs will support claims.

3. Obtain insurer pre-approval before incurring quotes or inspection costs

• The policy will not reimburse quote or inspection costs unless the insurer agreed to pay them before they were obtained (Parts 1, 2 and 3). Before engaging surveyors, trades or assessors, seek written insurer consent.

4. Note timeframes for rebuilding and for earthquake aggregation

• Start repair or rebuild works within six months of loss to avoid bearing cost increases from delay (Part 1 A). For earthquakes, track the 48-hour aggregation period and expect a $200 excess per earthquake event (Part 1 Earthquake).

5. Follow strata-recovery steps for strata title homes

• If the home is strata title, first claim from the Body Corporate’s insurer and any other insurers. Only after attempting recovery should you claim under this policy (Part 5). Maintain clear documentation of recovery attempts and insurer responses.

6. Comply with statutory requirements and safe standards

• Where statutory authority requirements affect repair or rebuild, seek insurer agreement that such costs are necessary to be insured under Part 1 F. For pool fencing, ensure fencing complies with legal standards to preserve owner’s liability cover (Part 4).

7. Be mindful of sub-limits and caps

• Understand the 20% cap on additional expenses and specific sub-limits ($10,000 or 10% for landlord fixtures, $1,000 for mortgage-discharge legal costs, $500 for matching decor, $5,000 cap for accidental damage, $10,000 per death etc.). Do not assume unlimited reimbursement (Parts 1, 2, 6).

8. Document attempts to recover from other insurers and Body Corporate

• For strata claims and claims where other insurers may be liable, document every step taken to recover or clarify coverage from other insurers. This includes copies of communications, insurers’ responses, and any denials or insufficiency findings (Part 5).

9. Prepare for evidentiary needs in death claims and liability disputes

• For death claims, obtain the death certificate from a registered medical practitioner demonstrating the cause of death as required (Part 6). For liability claims, gather witness statements, incident reports and legal documentation to support cover and to engage early with the insurer regarding legal representation approvals (Part 4).

10. Assess whether separate cover is needed for excluded exposures

• The policy excludes many things: business use parts of the property, building work costing $30,000 or more, vehicles, watercraft, certain LPG equipment not compliant with safety laws, and a list of gradual deterioration causes. If the insureds engage in building work, run a business from home, or have exposures excluded here, obtain separate bespoke cover.

11. Keep mortgage and title information up to date

• If there is a mortgage, understand how market-value settlements and mortgage discharge costs operate, and notify mortgagees where appropriate if the property is destroyed and market-value is paid (Part 1 G).

12. Seek insurer agreement for temporary accommodation and lost rent claims

• Temporary accommodation and lost rent are covered up to the reasonable costs for a reasonable period or up to 12 months, and are part of the 20% cap. Agree arrangements with the insurer as early as possible to avoid disputes about reasonableness and duration (Part 1 C and D).

13. For electrical motor fusion claims, confirm exclusions before engaging repairers

• Fusion cover excludes hiring a replacement motor, replacing worn bearings or switches, lighting or heating elements, contact points, and cost of removing/replacing motors forming part of a submersible pump (Part 3 What we do not insure you for). Establish coverage with the insurer before commissioning work.

14. Retain contemporaneous evidence of cause, timing and event

• Many exclusions hinge on causation (for example, whether rain entered due to poor maintenance or structural defect). Records, photos taken at the earliest practicable time and independent inspection reports (with insurer pre-approval where required) will be material.

15. Use written communications for approvals and confirmations

• The policy repeatedly conditions payment on insurer agreement “in writing” for legal services and pre-approval for quotes. Ensure approvals and negotiations are documented in writing to avoid evidential disputes (Part 4 What we pay and Parts 1-3).

Following these compliance steps will reduce the risk of non-payment or reduction of entitlement under the Statement of Conditions. Where coverage is uncertain or exposures are complex, obtain specialist insurance advice and consider alternative or additional insurance products to fill gaps that the Scheme explicitly excludes.