In Australia, home insurance may cover a permanently installed hot water system if it is damaged by an event covered by the policy. It generally will not cover a hot water system breakdown caused by age, corrosion, gradual deterioration or wear and tear. Policy terms, exclusions and optional benefits vary.
When might it be covered?
A permanently installed hot water system is generally treated as part of the building, so building insurance is usually the relevant cover. Contents insurance may cover insured belongings damaged by escaping water, but not normally the fixed system itself.
Cover depends mainly on the cause of the damage:
- Insured-event damage: The system may be covered if a listed event damages it, subject to the policy’s excess, limits and exclusions.
- Breakdown or deterioration: Mechanical failure, corrosion, gradual leaks and end-of-life failure are commonly excluded as wear and tear or maintenance issues.
The failed system and the resulting property damage are assessed separately. An insurer might exclude the failed tank or component but still cover sudden water damage to insured walls, floors or belongings. Do not assume accidental damage or motor burnout is included; these benefits may be optional, limited or unavailable.
Check your policy schedule and current Product Disclosure Statement (PDS), particularly the definitions of “building”, insured events, exclusions and optional cover. Ask your insurer to confirm how the wording applies to your claim.
What should you do before lodging a claim?
Make the area safe, limit further damage and preserve evidence before lodging a claim or replacing the system.
- Control the leak safely. Close an accessible water isolation valve if you can do so without risk. Keep away from wet electrical equipment and do not disconnect plumbing, gas or electrical fittings. If there is immediate danger, contact emergency services or the relevant utility.
- Record the damage. Safely photograph or video the system, leak, affected areas and damaged belongings before cleaning up or removing anything.
- Keep records. Note when the problem began and what you observed. Retain invoices, maintenance records and any tradesperson’s written findings without guessing at the cause.
- Check the policy. Review the excess, limits, exclusions, notification requirements and whether building or contents cover applies to each damaged item.
- Contact the insurer promptly. Ask whether it requires an inspection or approval before non-urgent repair, removal or replacement. Take reasonable steps to prevent further damage, but retain receipts and evidence.
- Use appropriately licensed trades. Leave plumbing, gas and electrical isolation, diagnosis and repair to the relevant licensed tradespeople.
If the system is leaking or the cause needs to be documented, contact our hot water repair team and have a licensed plumber make the plumbing safe and provide written findings for your insurer.