Frequently Asked Questions
You need to check the relevant legislation in your State and Territory, as the rules are different in each jurisdiction.
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What is a policy?
- A policy is a binding legal contract (enforceable agreement) that lists details about your insurance cover.
- It is very important to read the policy documents thoroughly and make sure you understand their contents.
- If you are unsure about anything written in your policy documents you should get legal advice.
- Our free Find a Lawyer directory may help put you in touch with the assistance you need.
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What is a Product Disclosure Statement?
- A Product Disclosure Statement is a document that lists:
- the benefits and risks associated with the insurance policy;
- the cost of the insurance; and
- the fees and charges such as exit fees and annual increases in fees.
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What is the Policy Schedule?
- A policy schedule gives an outline of the cover including:
- details of the type of cover such as the sum for which you are insured and any limits and exclusions on claiming under that cover;
- the details of the policy holder;
- the premiums you need to pay and how often they must be paid;
- any additional clauses; and
- any warranties.
- It is the most important document when taking out property insurance.
- You can use our free and anonymous Ask a Lawyer service if you have a particular issue you want to know more about.
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What is underinsurance?
- If the policy holder takes out insurance that does not cover the value of their possessions it is called underinsurance.
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What is insurance premium?
- Insurance premium is the amount of money that a policy holder must pay to the insurance company for the policy.
- The premium is usually paid monthly at the rate determined when the policy holder took out the policy.
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What is an insurance claim?
- When a policy holder’s property is damaged or their belongings are lost they can make a request to the insurance company for compensation (money to make up for the loss).
- This is called known as making an insurance claim.
- If you need legal assistance with an insurance claim our LegalPlan™ membership will allow you to ask lawyers to handle your matter for a Fixed-Fee Quote.
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What is loss?
- Before making an insurance claim a policy holder must show that they have incurred a loss as stated under their policy documents.
- Loss usually means:
- damage to property; or
- loss of possessions due to an accident, theft or other cause.
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What is an excess?
- An excess is an amount of money that a policy holder must pay for each incident when making a claim if they have chosen a policy with an excess.
- The amount of excess that must be paid is listed on the Product Disclosure Statement.
- For example, you might make a claim to be reimbursed (given money) for a television worth $1,000.
- However since your excess is $200 you must pay $200 of this amount and the insurer will pay the remaining $800.
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What is a sum insured?
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What is meant by ‘new for old’?
- Most insurance companies allow policy holders a ‘new for old’ scheme under their contents policy under which the full cost of replacing lost or damaged goods is covered by your insurer.
- Your insurer will rebuild, replace or repair your damaged item with a new item that is available at the time of replacement or repair from Australian suppliers.
- For example if your 42in LCD television covered under your policy was damaged your insurer will replace it with another 42in LCD television that is of the same standard as your previous television.
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What is a cooling off period?
- Insurance policies come with a cooling off period during which the policy holder has a certain number of days (usually 21 days) to consider the policy documents and cancel the policy.
- Policy holders may wish to get legal advice on the document during the cooling off period to clarify any rights and obligations that the policy imposes.
- You can use our Phone a Lawyer service for a preliminary legal consultation if you think you may need legal advice.
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What is third party insurance?
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What is comprehensive insurance?
- Comprehensive car insurance covers damage to both your vehicle and other people’s property (including their vehicle).
- You will be covered if your vehicle is damaged, lost or stolen.
- Damage from an accident is covered regardless of who caused the accident.
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What is dual or double insurance?
- Dual insurance occurs if two or more polices cover the same risk, loss and subject matter.
- Property owners are generally allowed to have dual insurance.
- However if you suffer loss or damage you cannot claim money from more than one insurer for the same damage.
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