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  1. #1
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    Default Insurance concerns

    Hi everyone,


    I was wondering how many people have seen these recent articles form ABC news:

    AAMI denies home insurance claim after couple fails to disclose they sell eggs at their gate - ABC News

    Thousands of people with side businesses could have the wrong home insurance, experts say - ABC News

    The jist of them is that if you are running any sort of busniess from home, it may void your entire insurance policy! I run a small bussiness selling turned items and am now very worried that my home insurance may be completely void - a very scary prospect. I had assumed that only parts of the property used for a bussiness would be uninsured - not the entire property.

    I was wondering if those of you who run sell turned items made from a home-based workshop have addressed this problem. Perhaps you have found a good insurance company that will still cover you?

    Any advise would be gratefully appreciated - at this stage its got me really upset and I feel I may have to just give up the whole bussiness (as small as it is).

    many thanks,
    Paul.

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  3. #2
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    Default

    Just ask your insurance company, different companies will have different policies.

  4. #3
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    Default

    QBE. Just be completely up front

    I've posted on this extensively over the years.

    On insurance for tools/contents, I even have a comprehensive policy covering everything specified in exacting detail. The spreadsheet has everything.

  5. #4
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    Another significant issue with contents insurance is the blanket limit of $5000 (or insert amount) for "tools of trade" in many contents insurance policies.

    I notified my insurer that I have a considerably much higher value of "hobby tools" which I wanted insured in my contents policy.

    We entered into a discussion on the definition of "trade" vs "hobby" and my contention that as I am a retired surveyor, have not earned an income from labouring for my father (a builder) or any "trade" in wood working in over 40 years, do not hold a formal recognized trade qualification, hold tertiary qualifications in surveying and practiced as a surveyor for 40 years, and I do not earn a "wage" or "income" from the tools that they cannot be "tools of trade." My contention is also that I am and obsessive hobbyist.

    I have notified them of my hobby, and have their acceptance of the cover for "hobby tools" in writing.

    Another definition that requires clarification is the ATO's "are you running a business or a hobby" which I have discussed with my Tax Agent, should I wish to progress from the occasional sale of goods to friends.

    It seems that we have some very convenient loose definitions of - income, trade, hobby, business ..... as they are all linked.

    As the insurance companies they have obligations to us to inform us in plain english policies and product disclosure statements what these terms are.

    In my H&C's policy 84 page PDS

    "Tools of trade are tools or equipment used for any business activity (but not home office equipment)"

    So how much can we rely upon

    "You do not need to tell us of anything which:
    – we should know about because of the business we are in; or"

    "Business activity
    means:
    – any activity specifically undertaken for the purposes of earning an income; or
    – any activity registered as a business and which you are obliged by law to register for GST purposes."

    I would suggest that IF you rely upon income from any home based business activity, or you have a "non-typical" hobby, that you inform your insurer and seek a formal response in writing of their acceptance of the terms of cover and the "additional risk."

    The Victorian Woodworkers Association has membership based specific insurance cover offered through a broker which is tailored to wood workers specific needs.

    This from WA is also handy to understand the hobby vs business conundrum.

    Is it a hobby or a business? | Small Business Development Corporation
    Difference between a business and a hobby | business.gov.au
    Mobyturns

    In An Instant Your Life CanChange Forever

  6. #5
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    Its a situation that cannot stand.

    There are too many people who do small things at home as an income generating hobby.

    If I do wire-wrapping as a hobby (which occupies a cardboard box and the kitchen table), that I sell on Etsy, the ordinary person will be caught afoul.


    Worse, what if I rent? I, as a tenant, can use my garage for anything I choose. How is the landlord, and therefore their insurers, ever to know?

    The situation is a mess.

    edit - this today Senator David Pocock calls for change as more small business owners find they don'''t have proper home insurance - ABC News

  7. #6
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    Default

    Didn't half the country just work from home with this pandemic?

    If those people were not covered by what they had paid for then insurance companies should be refunding money paid for what they were not going to cover.

  8. #7
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    Default

    thanks everyone for your replies so far, really appreciated. I feel a little better about the situation now that I can see there may be some way resolve the issue.

    The dilema I have currently is: do I contact my current insurer (RAA) and ask them first? - I suspect they will just canel my policy just like reported in the news. Or do I perhaps contact some other companies (such as QBE) and see if they would cover me before proceeding?

    I do have an ABN and bussiness name registered but it is a very small bussiness in terms of income. The registration was necessary because a number of my customers require it in order to make payment.

  9. #8
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    Call a broker and let them sort out the problem. A broker has another advantage, if you have a claim they go into bat for you if there are any problems.
    CHRIS

  10. #9
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    Default

    Plus 1 for the broker idea.
    The insurer they use is more likely to not want to lose the entire brokers business over a single claim.
    The few percent they charge is worthwhile, and in my case they even cover for a (very) short period IF you miss the renewal date, and they will followup.

    Quote Originally Posted by Chris Parks View Post
    Call a broker and let them sort out the problem. A broker has another advantage, if you have a claim they go into bat for you if there are any problems.

  11. #10
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    Quote Originally Posted by kosh View Post
    The dilema I have currently is: do I contact my current insurer (RAA) and ask them first? - I suspect they will just canel my policy just like reported in the news. Or do I perhaps contact some other companies (such as QBE) and see if they would cover me before proceeding?
    IF they take issue with the business then you effectively have no cover any way. Best to be up front ASAP to know where you stand.

    Now my contention is do we as consumers of insurance services have cause to take a class action against the insurance companies and underwriters for misleading us into believing we have had insurance cover when they ought reasonably to have known that a very significantly high proportion of small businesses in Australia are low turnover home based businesses???

    For them to hide behind the "full disclosure" terms of a policy and place the onus on the consumer to notify them of "increased risk" whilst taking premiums is reprehensible imo.

    IF a home based business, or a hobby pursuit, significantly increases risk then there should be specific questions on the contract renewal notice to define the risk.

    As an aside over 4 decades or so I have successfully taken on,
    1. Swann Insurance for a refund for miscalculating premiums on a motorcycle policy I have had for a number of years - almost $600.
    2. Suncorp for failing to apply home security discounts on our H&C policy that "mysteriously" disappeared from a very long standing policy.
    3. Suncorp for the annual CPI policy and premium adjustments that are well above official CPI figures.
    4. Suncorp for refusing MV insurance on a 3rd vehicle and my wife being accused by counter staff of "fraud" when requests for a Suncorp quote. online, through a dealer, by my wife and daughter on two occasions all received the same quotation with the same information supplied. In all dealings our under 25 daughter was a listed driver of the vehicle with us as the owners of the vehicle.
    5. AAMI for pi$$ poor legal representation supplied by AAMI in a MV claim that they pursued in court against the uninsured driver who was clearly the "at fault driver" (illegal U turn through a Tee intersection controlled by a stop sign) Magistrate was very obviously annoyed by the antics of the solicitor and ruled 60% at fault against us which meant each party met their own repairs. AAMI conciliated and agreed to reinstate our Rating 1 status.
    6. AMP for miscalculating H&C premiums over a number of years.


    We have only ever had two claims, both "not the at fault party" MV claim in over 4 decades.

    Consumers definitely require more consumer protections and enforceable penalties against insurers for their reprehensible actions!!

    Keep the ba$tards honest!!
    Mobyturns

    In An Instant Your Life CanChange Forever

  12. #11
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    Quote Originally Posted by Mobyturns View Post
    Now my contention is do we as consumers of insurance services have cause to take a class action against the insurance companies and underwriters for misleading us into believing we have had insurance cover when they ought reasonably to have known that a very significantly high proportion of small businesses in Australia are low turnover home based businesses???
    Yes.

    They cannot hide behind "disclosure" as the online forms do not allow such disclosure.

    The fact this is a stink shows that so few people know about the provision, which proves that insurers had a corresponding duty of "disclosure" and chose not to advise anybody.

    Being on Page 97 of a legal document PDS is not disclosure.

    “But the plans were on display…”
    “On display? I eventually had to go down to the cellar to find them.”
    “That’s the display department.”
    “With a flashlight.”
    “Ah, well, the lights had probably gone.”
    “So had the stairs.”
    “But look, you found the notice, didn’t you?”
    “Yes,” said Arthur, “yes I did. It was on display in the bottom of a locked filing cabinet stuck in a disused lavatory with a sign on the door saying ‘Beware of the Leopard.”

  13. #12
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    Quote Originally Posted by Chris Parks View Post
    Call a broker and let them sort out the problem. A broker has another advantage, if you have a claim they go into bat for you if there are any problems.
    I recently sold the farm, bought a house in town and moved the farming operation to a rented property. Because the farm now has no power I disclosed that I would probably have to do maintenance (welding etc) of the farm equipment at the new house. The broker said that this may affect the policy and they would have to contact the insurers for clarification.

    The broker finished up telling me that there was no insurer that would cover my situation unless I was willing to pay thousands more as I was now running a business from my garage. I would have to take out full business insurance on the farm and add the new house as a property extension.

    Because I don't sell any of my woodwork that part of the situation didn't seem to be any problem.

  14. #13
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    Quote Originally Posted by Bohdan View Post
    The broker finished up telling me that there was no insurer that would cover my situation unless I was willing to pay thousands more as I was now running a business from my garage. I would have to take out full business insurance on the farm and add the new house as a property extension.
    So, as a logical progression on this line it means that anyone doing fractal burning has no home & contents insurance cover.
    Mobyturns

    In An Instant Your Life CanChange Forever

  15. #14
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    If it's for sale - correct.

  16. #15
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    The logical outcome is that there will be a MULTITUDE of very well resourced hobbies now....

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