Hidden Gaps in Your Home Insurance Policy and How to Find Them

Most Australians assume their home insurance covers them for “everything that could go wrong”. But when disaster strikes, from floods to fires to theft, thousands discover painful surprises buried deep in the fine print.
These hidden coverage gaps can turn a policy that feels comprehensive into one that leaves you out of pocket when you need it most.

Understanding what’s really covered (and what’s not) is the first step to protecting what matters most.

The Reality of Underinsurance in Australia

According to the Insurance Council of Australia, more than 83% of homeowners are underinsured, often by as much as 20–30% below the true replacement cost of their property and belongings.

This gap happens for simple reasons: outdated valuations, forgotten items, or assumptions that “storm damage” automatically includes flooding or that jewellery is covered for its full value.
Unfortunately, that’s not always the case.

“People often only realise what’s missing from their policy after they make a claim,” says ICA CEO Andrew Hall.
“By then, it’s too late to fix.”

5 Common Coverage Gaps Homeowners Overlook

1. Flood vs. Storm Water Damage

Many policies distinguish between rainwater runoff (often covered) and flooding from rivers or lakes (often excluded or optional).
If your insurer defines “flood” narrowly, you could face massive repair bills even after paying premiums for years.

2. Jewellery and High-Value Items

Most insurers impose strict per-item limits, typically between $1,000–$5,000, unless you specify and individually list those valuables.
An engagement ring worth $15,000, for example, might only receive $3,000 in compensation unless declared.

3. Temporary Accommodation

If your home becomes uninhabitable after a disaster, check how long your insurer will pay for temporary accommodation. Some cover only 12 weeks, while others extend up to 12 months.

4. Contents Away from Home

Do your belongings stay covered when taken outside? Items like laptops, cameras, and instruments are often only protected inside your home — unless you’ve added portable contents coverage.

5. Maintenance-Related Exclusions

Damage caused by wear, tear, or neglect (like blocked gutters or roof leaks) is typically excluded. This means failing to maintain your home properly could void parts of your claim.

How to Identify These Gaps Before It’s Too Late

Finding gaps in your coverage doesn’t require reading every page of your PDS — you just need the right system.

Here’s what every homeowner should do:

• List and value your items accurately, updating at least once a year.
• Check category and per-item limits in your policy.
• Understand exclusions related to water, fire, or accidental damage.
• Ask your insurer directly: “Is this item or situation fully covered?”
• Use digital tools like myVal to automate and simplify the process.

How myVal Makes Policy Checks Simple

The myVal app was designed to help homeowners uncover these hidden gaps effortlessly, without wading through endless policy documents.

With myVal, you can:

• Run a policy health check that scans and highlights potential coverage gaps based on your item list and insurer terms.
• Flag high-value or unlisted items, so you know exactly what needs to be specified.
• Create a visual inventory by snapping photos of each item — myVal records serial numbers, brands, and estimated values automatically.
• Receive reminders to review your coverage annually or whenever your inventory changes.

Together, these tools turn confusion into clarity — giving you real control over your insurance coverage.

Peace of Mind Starts with Preparation

Insurance shouldn’t be a guessing game. The more you know about your policy, the fewer surprises you’ll face when life takes an unexpected turn.

Before the next storm season or renewal date, take ten minutes to review your cover and update your digital inventory.
You might be surprised by what you discover — and relieved by how easy it is to fix.

Download myVal today and uncover the hidden gaps in your insurance before they cost you thousands.

References

Insurance Council of Australia (ICA). (2025). Underinsurance in Australia: The Growing Protection Gap. Retrieved from https://www.insurancecouncil.com.au

Australian Financial Review. (2025, February 10). Most Australians underinsured as natural disaster costs soar.

Choice Australia. (2024, December). What your home insurance really covers (and what it doesn’t). Retrieved from https://www.choice.com.au