What is a ‘Make Safe’?
A ‘Make Safe’ is immediate rectification works to prevent further damage to your property or make the site safe to visit. This may include fitting tarpaulins to your roof or treating debris with an adhesive to prevent the spread of contaminants.
A ‘Make Safe’ may initially be conducted by emergency services, government agency or a contractor appointed by your insurer.
Who pays for debris removal?
In the event of total loss, debris removal can be very expensive depending on location and whether contaminants (such as asbestos) are present. Some policies may provide a certain allowance for debris removal above the sum insured, while others will deduct this cost directly from the sum insured. For more information, check your insurance policy or speak with your insurer.
If many buildings have been destroyed, Local Councils will usually waive the tip fees which significantly reduces the cost of debris removal. In some circumstances, the State Government may cover all or part of the cost for debris removal.
What is a Scope of Work?
A Scope of Work is a document that sets out the agreed items that need to be replaced or repaired. After you have lodged a claim, an assessor will visit your property to assess the damage. You can assist the assessor by helping them identify all the damage. The assessor will then prepare a Scope of Work for you to approve.
You do not have to sign the Scope of Work if you do not agree with it. If there are items missing from the Scope of Work, let your assessor know as soon as possible.
Can I change the Scope of Work?
A Scope of Work is not necessarily fixed and can be amended by agreement with your insurer. Additional damage may not become apparent until the repair work commences. In this event, the insurer may add additional items throughout the repair. If new items need to be added to the Scope of Work, your insurer may appoint another assessor or an engineer to provide a second opinion.
‘Lack of maintenance’ – what does it mean?
If a house hasn’t been well maintained, it is at a much higher risk of being damaged by extreme weather. For this reason, when you apply for insurance, insurers require you to confirm your home is well maintained. If an insurer believes your home hasn’t been well maintained and it has contributed to the damage, they may reduce the amount they will pay you or require you to fix the maintenance issue before they repair your home. In some cases, the insurer may deny the claim.
Do insurers use local builders?
Insurers constantly make an effort to support local trades during disaster recovery. However, the primary focus will always be on ensuring homes are repaired quickly and to the best possible standard. Relying solely on local builders will significantly delay the recovery process. For this reason, insurers also use qualified and experienced builders from across Australia to ensure communities are back on their feet as soon as possible.
How long will it take to repair my building?
The time it takes to repair your building will depend on the extent of damage and the complexity of your claim. Unfortunately, repairing extensively damaged buildings can take considerable time. The majority of claims will be closed within 6 months, but it may take up to 12 months for complex repairs and total rebuilds. Once your Scope of Work is complete, ask your insurer for a timeline.
Rebuilding to a newer code
Depending upon the age of your home and its location, it may need to be repaired to a higher standard of construction that was originally used. For example, if your home is on bushfire prone land, it will need to be rebuilt to the Bushfire Attack Level (BAL) rating for your address. This will increase the cost of repair.
Under-insurance / Rebuilding will cost more than my insurance policy provides
You may have selected insurance cover for less than the cost of repairing or replacing your property. In this event, you will either need to contribute to the cost of repair above the amount you are insured for, or accept a cash settlement.
What is a cash settlement?
A cash settlement means the insurer gives you a cash payout instead of repairing your building. Be aware, if you accept a cash settlement that may be the end of your insurance policy, depending on the extent of the damage.
Cash settlements can be for part of the repair or for full and final settlement of your claim. Therefore, you need to ensure all damage has been noted before accepting a cash settlement as additional damage will generally not be covered by the insurer.
If you accept a cash settlement, your insurer does not guarantee the quality of the repairs. Therefore, if there is a fault with the repair work, you will need to seek rectification from the builder you appointed to do the work.
Do I have to repair my house with the cash settlement?
You are entitled to spend your cash settlement in any way that you choose. That said, your building will not be insurable whilst it remains unrepaired (see ‘lack of maintenance’ above). If your home is damaged in the future, and you failed to repair previous damage, an insurer is likely to decline your claim.
Why is my cash settlement less?
If you accept a cash settlement, it may be less than the amount your insurer would have paid its preferred builder. This is because the insurer’s builder is often from out-of-area and has an allowance for additional expenses (such as accommodation and transport). These costs are not incurred by local builders and therefore are not included in your cash settlement amount.