‘Unoccupied for 60 days’: the insurance exclusion worrying Victorians in lockdown

Major insurers vow not to deny claims or charge an excess to people unable to visit holiday homes due to COVID-19 restrictions, despite extended vacancy being a common exclusion clause in home and contents policies.

Melburnians have been told not to visit second properties in regional Victoria since stay-at-home orders came into effect in July, prompting concern properties may be left uninsured on the eve of bushfire season.

A firefighting helicopter tackling a bushfire near Bairnsdale in Victoria’s East Gippsland.Credit:Victorian government/AAP

Most insurers have a clause in their product disclosure statements excluding cover for homes that are unoccupied for a certain period of time, usually 60 days.

Insurers that do allow a claim typically must be informed in writing beforehand, with some then charging an excess or higher premium.

In one example, RACV's home and contents policy requires homes to be in a "lived-in state", which includes keeping the lawns mowed, collecting mail and organising for someone to check inside once a week.

Under stage-four restrictions, Melburnians are allowed to leave home only for essential reasons between 5am and 9pm. Travelling to second properties is not allowed, except to carry out emergency maintenance.

RACV.Credit:Jessica Shapiro JLS

"We would not intend to deny a claim … if a policyholder is unable to attend their property due to COVID-19 government restrictions," they said.

QBE, which provides home insurance through ANZ, also said it would not deny coverage.

"We have not applied this clause to any policy holders in Victoria since the restrictions were introduced and we do not anticipate doing so," a spokesperson said.

Westpac General Insurance, another insurer with a 60-day vacancy clause, said it would "not unreasonably rely on that policy exclusion for the period of restrictions".

Allianz, which supplies insurance to NAB, said it had waived the 60-day occupancy requirements for those affected by COVID-19.

Allianz.Credit:Christopher Pearce

Other insurers committed to dropping excess fees on homes unoccupied due to lockdown.

Suncorp, which operates through brands AAMI and Apia, said a $1000 excess would not apply.

"We are waiving the additional unoccupied excess if owners are unable to visit their properties due to restrictions," a spokesperson said.

Commonwealth Bank's CommInsure also said it would not charge additional excess. Under its product disclosure statement, policies can be cancelled if customers don't say in advance that their home will be unoccupied for more than 60 days.

Budget Direct, said it was taking a "very pragmatic approach" to customers in Victoria and unoccupied homes affected by COVID-19 restrictions were likely to retain coverage.

Vacant homes in Victoria could be covered for an extended period of time, if the customer obtains agreement from Budget Direct having discussed their specific circumstances with the insurer.

QBE.Credit:Bloomberg

The Insurance Council of Australia urged customers who cannot visit their properties during lockdown to contact their provider to ensure they are still covered.

"Properties that are left unoccupied for lengthy periods carry a much higher risk for something going wrong," said Campbell Fuller, Insurance Council of Australia's head of communications.

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