What is a cash settlement?
A cash settlement is a lump sum payment we may offer to settle your claim instead of using our own builder to repair your home or replace your contents.
A cash settlement can cover part (or all) of the total amount claimed.
More information
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Cash settlementWhen are cash settlements offered?
We will offer you a cash settlement when we cannot use our builder and supplier network to repair your home or replace your contents.
This can happen for various reasons, including (but not limited to):
- We can only partially accept your claim as your home has pre-existing damage or issues that are not covered by your insurance policy
- The cost to repair your home exceeds your policy limits or sum insured
- Our supplier network cannot source the contents items you need to replace
- Where materials to repair your home are not available or we cannot reasonably get materials that match the undamaged areas of your home.
- Where it would be unsafe to repair or rebuild your home
- Where there is joint ownership, such as a damaged boundary fence
- You are in the process of, or have completed, repairs outside of your insurance claim
- The damaged item is not something you wish to repair or replace (for example, a pool or a disused shed).
Your assessor or claims manager will explain this to you thoroughly and answer any questions you may have.
How will my cash settlement be calculated?
After we have assessed the damage and considered quotes, we can calculate the cash settlement amount.
We rely on our suppliers to understand the repair methods, labour, materials, and costs needed to repair your home or replace your contents; and will provide you with this information when offering a cash settlement.
Your claims manager or assessor will be able to clearly explain how your cash settlement has been calculated and answer any questions you may have throughout the claims process.
Your cash settlement can cover part (or all) of the total amount claimed, depending on your individual claim circumstances.
For example, we may replace some of your contents via our preferred suppliers and cash settle the remaining contents if our suppliers are unable to source them. Or if the damage to your home is extensive, we may manage the repairs to your home and offer you a cash settlement for your contents so you can replace your contents while you are in long term temporary accommodation.
How do I know if a cash settlement is right for me?
When deciding if you will accept a cash settlement, there are a few things to consider:
- We won’t be responsible for the time, cost; or quality of workmanship, materials, and repairs completed by your chosen repairer. However, you may have greater flexibility in choosing and managing your own builder and repairs.
- You may wish to obtain independent quotes based on the Scope of Work provided by us. These quotes can assist you with judging potential delays, and understanding what a fair and reasonable amount to settle is. Because of our supplier network, the cost to complete the repairs may be lower for us than the market rates available to you.
- When renewing your policy, you may be asked to provide documentation to support your renewal. For example, receipts for completed repairs or replacement items.
- If you have a mortgage on your home, your bank or lender may be entitled to some (or all) of a cash settlement payment. If you are considering a cash settlement, we recommend discussing this with your bank or lender so you can understand what this means for you.
- When you accept a cash settlement that pays out your full home sum insured, your insurance policy for your home will end on the day payment of the sum insured is made to you, or when we otherwise finalise your claim. If you wish to insure with us again you will need to purchase a new policy.
If you are using your own builder, we recommend enquiring about their insurances, warranties, and guarantees.
Cash settlement process
- Your claims manager or assessor will provide you with a full breakdown of the cash settlement offer.
- In most circumstances, we will prepare a Cash Settlement Fact Sheet for your consideration. It will include the amount of your settlement and any options that are available to you.
- If you decide to accept a cash settlement, please call or email to let us know. Your claims manager will:
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- Ask for your bank account details, including your account name, BSB, and account number.
- Contact you when we process your cash settlement fund transfer and advise when you should expect to receive the funds into your account (this can take around 3 to 5 business days).
Frequently asked questions
We have listed some of the most common questions our claims teams hear from our customers.
If you would like more information about these questions, or one we haven’t already mentioned, please reach out to your claims manager (someone will have been assigned to you if you have already submitted a claim) or contact us.
Can I use my own builder to repair my home?
Yes. If you want to use your own tradespeople, we will consider your request to cash settle your claim.
This may also include payment for any urgent repair work that was initially done to minimise damage to your home. We will need you to send through photos, the invoice for any urgent repair work, and the detailed quote for the reinstatement work.
Our team will review the documentation and any supporting information, and if the invoices and quotes are fair and reasonable and match the repair details in our Scope of Work, we may be able to settle your claim without needing to visit the property.
Important things to consider when arranging for repairs to be completed on your home:
- It’s important you choose suitably qualified tradespeople who you can trust to undertake the required work
- You will need to arrange and co-ordinate the builders and tradespeople and any issues with the quality, cost or timeliness of the repairs will need to be raised directly with them. We will not have any responsibility for repairs that you arrange after a cash settlement
- We may require information about progress on completing the repairs prior to offering to renew your insurance policy
- Don’t forget to keep any invoices, receipts, or records of the repairs you’ve had completed. These can be helpful if you need them for guarantees or warrantees from the tradespeople you chose.
What if I have questions about how my cash settlement has been calculated?
Your claims manager or assessor will be able to clearly explain how your cash settlement has been calculated and answer any questions you may have throughout the process.
I accepted a cash settlement but found more damage. Is this covered?
We will need to assess the additional damage to determine if it will be covered.
If you identify more damage, please stop the repair work (if it is safe to do so) and contact your claims manager immediately. We will confirm the next steps for assessing the new damage and will make an additional payment if you are entitled to this as part of your original claim.
What if I don’t want to cash settle, but you can’t repair my home?
If it’s not possible for us to repair your home, and you don’t want to cash settle, we will work with you to come to an agreement. Your claims manager will be able to give you more information about how we do this.
Will taking a cash settlement affect my insurance policy?
If we only pay part of the home or contents sum insured to you, your policy will continue for the remainder of the period of insurance.
If we pay the full home or contents sum insured to you, your cover will end once the cash settlement for your sum insured has been paid to you or when we finalise your claim (whichever occurs last).
When it comes time to renew your policy, you may also be required to submit supporting documentation for any claims that have been cash settled. For example, you may need to provide copies of receipts for building work or the replacement of contents items.
I’m going to take a cash settlement and manage the repairs myself. Does my home insurance cover me while these repairs are being made?
When we pay you a cash settlement, the undamaged areas of your home will continue to be covered by your existing home policy.
It is important to note that your policy will automatically exclude any unrepaired damage until all repairs have been completed.
We’re here to help you with your cash settlement
It’s important to know your options when it comes to considering a cash settlement for your home or contents policy. We want to make sure you have the information you need to make an informed decision.
If you have already been assigned a claims manager, they are your best point of contact for assistance with your cash settlement.
If you have not yet submitted a claim, you can do so online or call the claims number listed on the website of the insurance brand you purchased your policy through.
Additional support for our customers
We offer assistance for customers who are experiencing financial hardship, vulnerability, domestic violence, and more. To find out how we can help, visit our Support for customers page.
Our complaints process is available on our complaints policy page.
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