Australian Military Bank Standard vs Plus Home Cover

Australian Military Bank offers two home insurance options—Standard Home Cover and Plus Home Cover—and the main difference is the level of coverage for contents and additional benefits. Standard covers the basics for building and contents, while Plus adds higher limits for specific items, accidental damage, and optional extras. This article explains the key differences to help you decide which fits your needs.

Formula

The calculator estimates the annual premium for both Standard and Plus cover based on the sum insured for building and contents. The formula uses a simple rate per $1,000 of coverage: Standard is 0.25% of the total sum insured, and Plus is 0.32%.

In symbols: Premium = (Building + Contents) × Rate, where Rate is 0.0025 for Standard and 0.0032 for Plus. These rates are illustrative only—actual premiums depend on your location, excess, and insurer’s pricing.

Worked Example

Using the default values: Building = $500,000, Contents = $50,000, Plus = yes.

1. Total sum insured = $500,000 + $50,000 = $550,000
2. Standard premium = $550,000 × 0.0025 = $1,375 per year
3. Plus premium = $550,000 × 0.0032 = $1,760 per year

The calculator shows the same results: Standard $1,375, Plus $1,760. The difference is $385 per year, which reflects the higher level of cover.

Background: Australian Military Bank Home Insurance

Australian Military Bank (formerly Australian Defence Credit Union) offers home insurance through a partnership with an underwriter, not as a standalone insurer. The bank provides two tiers: Standard and Plus. Standard is designed for budget-conscious members who want basic protection, while Plus adds features like accidental damage and higher limits for valuable items. Both cover the physical structure (building) and personal belongings (contents), but the specifics vary.

Key Differences Between Standard and Plus

The main differences are in the level of coverage and the limits for certain items:

• Accidental damage: Plus includes accidental damage cover for both building and contents, while Standard does not. This means if you accidentally knock a hole in a wall or spill wine on a carpet, Plus would cover the repair, but Standard would not.
• Contents limits for high-value items: Plus typically has higher sub-limits for items like jewellery, watches, and art. For example, Standard might limit a single item to $2,000, while Plus could cover up to $5,000 or more.
• New-for-old replacement: Both plans usually offer new-for-old replacement, but Plus may have a higher limit on the total contents payout without a single-item cap.
• Optional extras: Plus allows you to add optional covers like portable valuables (items taken outside the home) or motor burnout, while Standard may not offer these.

How to Choose Between Standard and Plus

Your choice depends on your circumstances and risk tolerance. Consider the following factors:

• Value of contents: If you have expensive electronics, jewellery, or musical instruments, Plus provides better protection due to higher sub-limits.
• Lifestyle: If you have children or pets, accidental damage cover (Plus) is often worth the extra cost, as accidents are more likely.
• Budget: Standard is cheaper, but you may face out-of-pocket costs if an accident occurs that isn’t covered.
• Existing coverage: Check if you already have accidental damage cover through another policy (e.g., credit card or contents insurance from another provider).

If you are unsure, a common approach is to list your belongings and estimate their total value. If the value exceeds the Standard sub-limits, Plus is usually the safer choice.

Common Problems and Misconceptions

A common misconception is that Standard cover is sufficient for most people because it covers the basics. However, many policyholders only discover the gaps after a claim. For example, a standard policy may not cover accidental glass breakage, which is a common household incident. Another issue is underinsurance—people often underestimate the cost to rebuild their home or replace contents, leading to a shortfall. Always review your sum insured annually and adjust for inflation.

Another problem is that some members assume the bank’s insurance is automatically the best deal because they are a member. While the bank offers competitive rates, it’s wise to compare with other insurers to ensure you’re getting the right cover at the right price.

Cost Comparison and Value

The cost difference between Standard and Plus varies based on your location, sum insured, and excess. Using the illustrative rates above, Plus is about 28% more expensive than Standard. For a typical home with a $500,000 building and $50,000 contents, that’s roughly $385 extra per year. In return, you get accidental damage cover and higher limits, which could save you thousands if you need to claim. For example, if you accidentally damage a $3,000 TV, Standard might not cover it, while Plus would, making the extra premium worthwhile.

Safety and Accuracy Details

When calculating your sum insured, always use the actual replacement cost, not the market value of your home. For contents, list every item and its replacement value. The calculator above uses a simple rate for illustration; the actual premium will be based on the insurer’s underwriting criteria, including your postcode, building materials, and security features. Always read the Product Disclosure Statement (PDS) to understand exclusions and limits.

Frequently Asked Questions

Does Standard cover accidental damage? No, Standard does not include accidental damage for building or contents. That is a key feature of Plus cover.

Can I add accidental damage to Standard? It depends on the policy. Some insurers allow you to add accidental damage as an optional extra, but with Australian Military Bank, it’s typically only available in the Plus tier.

What is the difference in premium? The exact difference depends on your sums insured and location. Using the illustrative rates, Plus is about 28% higher, but the actual difference could be more or less.

Are there any items not covered by Plus? Yes, all policies have exclusions. Common exclusions include wear and tear, insect damage, and pre-existing damage. Plus may also have limits on certain high-value items, so check the PDS.

Do I need Plus if I rent? If you rent, you only need contents insurance, not building cover. Plus contents cover would provide accidental damage and higher limits, which can be useful if you have expensive belongings.

How do I change from Standard to Plus? Contact Australian Military Bank directly to switch your policy. They will adjust your premium and provide a new PDS.

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in t | Building sum insured | AUD | 500000 | 0
in c | Contents sum insured | AUD | 50000 | 0
in p | Plus cover (1=yes, 0=no) | - | 1 | 0
out base | Estimated annual premium (Standard) | AUD | (t + c) * 0.0025 | 0
out plus | Estimated annual premium (Plus) | AUD | (t + c) * 0.0032 | 0