Insurance Policy Review: What Your Policy Covers, Non-Disclosure, Unfair Terms and Your Rights (Australia, 2026)

Prepared by Claim Done from the Insurance Contracts Act 1984, the Insurance Contracts Regulations 2017, the ASIC Act 2001, the Corporations Act 2001, ASIC and Moneysmart pages, and the General Insurance Code of Practice listed under Sources. Last checked 8 November 2026.

Insurance policies at a glance

What does my home insurance cover?

Start with the policy wording, not the brochure. Moneysmart says that to find out what isn’t covered “you may need to read the product disclosure statement (PDS)”, and suggests checking exclusions, caps, limits, special conditions and extended cover, and that the sum insured covers the full cost of rebuilding.

Standard cover

For certain policies bought by an individual, the law sets a standard cover (ICA s 35; Insurance Contracts Regulations Part 3). These are car, home buildings, home contents, sickness and accident, consumer credit and travel insurance. For home buildings, the prescribed events include fire, lightning, earthquake, theft, burst or leaking fixed pipes and tanks, malicious damage, impact by a vehicle, falling trees, storm, flood, action of the sea, tsunami, erosion, landslide or subsidence, glass breakage, and owner or occupier liability (reg 19(1)). Wear and tear, rust, insects or vermin, business use and intentional damage are outside it (reg 19(2)).

The catch: the insurer can pay less than the standard cover if, before you bought, it “clearly informed the insured in writing” of the lower cover, for example by giving you the policy wording, or you knew or should have known (s 35(2)). In our reading, the standard cover matters most where the policy wording was never given to you.

Unusual terms

For other policies, an insurer “may not rely on a provision … of a kind that is not usually included in contracts of insurance that provide similar insurance cover” unless it clearly told you in writing about its effect before you bought (s 37). A notice given when you first bought carries over to every renewal (s 11(10)(a)), so the first set of documents matters.

Flood cover

For home building, contents, combined, strata residence and small business property policies, flood has one standard meaning: water escaping from the normal confines of a lake, river, creek or other natural watercourse, reservoir, canal or dam (reg 34(1)). Before you buy, the insurer must clearly tell you in writing whether the policy covers flood (s 37C), and if it covers any flood event it is taken to cover flood as defined, up to its highest flood limit (s 37D). For home and contents you are also entitled to a Key Facts Sheet within 14 days of asking or buying, unless you deal through a broker or decline it (s 33C).

What do I have to tell my insurer?

It depends on whether the policy is a “consumer insurance contract”: one taken out wholly or predominantly for personal, domestic or household purposes (ICA s 11AB). A policy is presumed to be one unless the contrary is established.

• Personal policies: “an insured has a duty to take reasonable care not to make a misrepresentation to the insurer before the relevant contract of insurance is entered into” (s 20B(1)). Whether you took reasonable care depends on the circumstances, including how clear and specific the insurer’s questions were and whether it explained why the answers mattered (s 20B(3)). Failing to answer a question, or giving an obviously incomplete answer, is not of itself a misrepresentation (s 20B(5)). This duty applies to general (non-life) policies entered into, renewed, extended or varied from 5 October 2021.
• Business policies: the older duty of disclosure still applies. You must tell the insurer every matter you know is relevant, or a reasonable person in your circumstances would know is relevant, even if it was not asked (s 21(1)), with exceptions such as matters that reduce the risk or that the insurer already knows.
• Honest belief: an untrue statement made on a belief a reasonable person would have held is not a misrepresentation (s 26(1)).

Insurance claim denied for non-disclosure or misrepresentation

For general insurance (home, car, travel and similar), section 28 sets the limits:

1. If the insurer would have offered the same policy for the same premium anyway, the mistake makes no difference (s 28(1)).
2. “If the relevant failure was fraudulent, the insurer may avoid the contract” (s 28(2)).
3. Otherwise, its liability on a claim “is reduced to the amount that would place the insurer in a position in which the insurer would have been if the relevant failure had not occurred” (s 28(3)).

In our reading, that reduction can be to nothing if the insurer would have refused to insure you at all, but if it would only have charged more or added an exclusion, the claim is cut only to that extent. Life insurance is different: for a non-fraudulent failure the insurer can avoid the policy within 3 years if it would not have insured you on any terms (s 29(3)).

Things you did after buying

A policy may say a claim can be refused because of something you did or failed to do after buying, such as a security, maintenance or late-notice condition. Section 54 says the insurer may not refuse “by reason only of that act”; it can reduce the claim by the amount that fairly represents the harm to its interests. It can refuse if the act could reasonably be regarded as capable of causing or contributing to the loss, unless you prove no part of the loss was caused by it (s 54(2)-(3)).

Can unfair terms in an insurance policy be challenged?

Yes, for policies entered into or renewed from 5 April 2021. The Insurance Contracts Act expressly preserves relief under the unfair contract terms rules of the ASIC Act (ICA s 15(2)(d)). A term in a standard form consumer or small business insurance contract is void if it is unfair: it causes a significant imbalance, is not reasonably necessary to protect the insurer’s legitimate interests, and would cause detriment (ASIC Act ss 12BF-12BG). The insurer must prove a term is reasonably necessary. For policies made or renewed from 9 November 2023, proposing or relying on an unfair term is also a contravention.

Some terms are outside the test (s 12BI):

• terms describing what is being insured;
• the premium disclosed before you bought;
• a transparent excess or deductible disclosed before you bought;
• terms required or expressly permitted by law.

In our reading, exclusions, conditions and claim-process terms are not “what is being insured”, so they can be tested, while the excess and premium generally cannot. Only a court can decide a term is unfair.

Separately, every insurance contract carries a duty of utmost good faith on both sides (ICA s 13), and a party “may not rely on the provision” where relying on it would breach that duty (s 14(1)).

Cooling-off, renewal and cancellation

• Cooling-off: retail clients buying car, home building, contents, sickness and accident, consumer credit, travel, or personal and domestic property insurance generally get 14 days to cancel (Corporations Act ss 1019A-1019B, 761G(5)). The right is lost once you make a claim.
• Add-on insurance sold with a car or loan: a 4-day pause applies before it can be sold, with a full refund within set time limits if it was sold early. Comprehensive car insurance is exempt.
• Renewal: at least 14 days before renewable cover expires, the insurer must tell you in writing when it expires and whether it will negotiate to renew. If it does not, and you have not replaced the cover, the cover continues (ICA s 58).
• Refunds: under the General Insurance Code of Practice, a refund you are entitled to on cancelling is paid within 15 business days (para 55).

If your claim is refused or delayed

• Handling and settling claims is a regulated financial service, and since 1 January 2022 it must be provided “efficiently, honestly and fairly” (Corporations Act ss 766G, 912A; ASIC).
• Insurers that subscribe to the General Insurance Code of Practice commit to a decision within 4 months of receiving your claim, with exceptions, and to tell you in writing the reasons for any refusal and your right to the information and expert reports relied on (paras 77-78, 81). The Code is an industry code, not legislation.
• A complaint gets a response within 30 calendar days (ASIC RG 271.56). After that, or at any time under the Code, you can go to the Australian Financial Complaints Authority (AFCA), which “hears complaints for free” (Moneysmart).
• If payment is unreasonably delayed, interest runs from the day it became unreasonable to withhold it (ICA s 57).
• A fraudulent claim can be refused, but the policy cannot be cancelled for it (s 56).

What our review checks

Upload the policy, PDS or certificate of insurance and get a plain-English report written for the policyholder, usually about 5 minutes after you pay. It:

• leads with what is not covered: exclusions, excesses, sub-limits and conditions that could stop or cut a claim
• says whether the policy is a consumer or business policy, and which disclosure duty applies
• compares the cover with the standard cover for home, contents, car and travel policies
• lists unusual terms and checks how flood is dealt with
• flags conditions about things you must do after buying, and explains section 54
• flags terms that may be unfair, and explains which terms cannot be challenged
• explains cooling-off, renewal and your rights if a claim goes wrong

The report explains what your policy says and what the law provides. It does not tell you whether to buy a policy, it is not legal or financial advice, and it cannot say whether a particular claim will be paid.

Get your insurance policy reviewed – $29

Questions people ask

What does my home insurance cover?

What the policy wording says, less its exclusions, limits and excess. For home buildings policies bought by an individual, the law sets a standard cover for events such as fire, storm, flood, theft and burst pipes, but the insurer can give less if it clearly told you in writing before you bought, for example by giving you the policy wording (ICA s 35).

Can my insurer deny a claim for non-disclosure?

For general insurance, it can cancel the policy only if the failure was fraudulent. Otherwise, for general insurance, it can reduce the claim to what it would have paid had you answered correctly, and if it would have insured you on the same terms anyway it cannot reduce anything (ICA s 28).

What do I have to tell my insurer when I buy a policy?

For a personal policy, you must take reasonable care not to make a misrepresentation, which mostly means answering the insurer’s questions carefully and honestly (ICA s 20B). For a business policy, you must disclose every relevant matter you know, even if not asked (s 21).

Do unfair contract terms laws apply to insurance?

Yes, for policies entered into or renewed from 5 April 2021, under the ASIC Act. Exclusions and conditions can be tested, but terms describing what is insured, the disclosed premium and a clearly disclosed excess cannot (ASIC Act s 12BI). Only a court decides a term is unfair.

Is flood covered by home insurance?

For home buildings policies, flood is part of the standard cover unless the insurer clearly told you in writing before you bought that it is not. The insurer must clearly tell you in writing before you buy whether flood is covered, and if any flood event is covered, flood has one standard meaning up to the policy’s highest flood limit (ICA ss 37C-37D).

Can an insurer refuse a claim because I broke a policy condition?

Not just because of that. If the breach happened after you bought the policy, the insurer can only reduce the claim for the harm to its interests, unless the breach could reasonably have caused or contributed to the loss (ICA s 54).

Is there a cooling-off period on insurance?

Usually 14 days for personal general insurance such as car, home, contents and travel cover (Corporations Act s 1019B). The right ends once you make a claim. Check your policy for a longer period.

How long does an insurer have to decide my claim?

Insurers bound by the General Insurance Code of Practice commit to a decision within 10 business days of having all the information they need, and within 4 months of receiving the claim, with exceptions such as catastrophes or suspected fraud (paras 76-78).

What can I do if my insurance claim is denied?

Ask for the reasons and the information relied on in writing, complain to the insurer, which must respond within 30 calendar days, then take it to AFCA, which is free. Check whether sections 28, 37 or 54 of the Insurance Contracts Act limit what the insurer can rely on.

Do I have to be told before my policy renews?

Yes. At least 14 days before renewable cover expires, the insurer must tell you in writing when it expires and whether it will renew. If it does not and you have not replaced the cover, the cover continues (ICA s 58).

Is the excess an unfair term?

Generally no. A transparent excess or deductible disclosed before you bought is outside the unfair terms test (ASIC Act s 12BI(1)(f)), so check the excess amounts before you buy or renew.

Is the insurance policy review legal advice?

No. It is a plain-English report that explains what your policy covers, what it does not, and your rights. It does not recommend a policy or predict whether a claim will be paid. Claim Done is not a law firm.

Related guides

• Insurance claim denied or underpaid: how to write a complaint
• Insurer denied your claim? Take them to AFCA
• Flood claim refused by your home insurer?
• All contract reviews

Claim Done is not a law firm and does not give legal or financial advice; this page is general information about Australian law as at 8 November 2026. The General Insurance Code of Practice binds only insurers that subscribe to it.

Sources (checked 8 November 2026)

• Insurance Contracts Act 1984 (Cth), Compilation No. 33 (ss 11, 11AB, 13-15, 20B, 21, 26, 28, 29, 33C, 35, 37, 37B-37D, 54, 56-58)
• Insurance Contracts Regulations 2017, Compilation No. 3 (Part 3, regs 19, 34)
• ASIC Act 2001 (Cth), Compilation No. 109 (ss 12BF-12BI, 326A)
• Corporations Act 2001 (Cth), Compilation No. 149 (ss 761G, 766G, 912A, 1019A-1019B)
• ASIC: making insurance claims under the new reforms
• ASIC Regulatory Guide 271: Internal dispute resolution
• Moneysmart: choosing home insurance
• Moneysmart: how to complain
• Insurance Council of Australia: General Insurance Code of Practice (paras 15, 55, 76-78, 81, 154)