How to Read and Understand Your Insurance Policy

Most Australians have never fully read their insurance PDS. Given that it's the document that determines whether a claim gets paid, that's a significant risk. Here's how to read one efficiently.

Start with the schedule, not the PDS

Your policy schedule is the personalised one-page document showing your name, covered items, premium, excess, and policy number. Read this first to confirm everything is correct — especially the insured value and covered parties.

The five sections to prioritise in the PDS

• •What we cover: The definitions of covered events. Don't assume — 'storm' and 'flood' are legally distinct in most policies.
• •What we don't cover: The exclusions. This is the most important section. Read it completely.
• •Sub-limits: Usually in a table. Check that sub-limits are adequate for high-value items you own.
• •How to make a claim: Know this before you need it. Some policies require same-day or next-day notification.
• •Definitions: Policies define their own terms. 'Contents', 'home', 'accident' may not mean what you think.

Common surprises in the fine print

• •Jewellery and art usually have low sub-limits — schedule them separately if they're valuable
• •Running a business from home may void your home contents cover
• •Leaving doors or windows unlocked may void a theft claim
• •Cancelling or missing a premium payment can immediately void cover for ongoing claims