Bank of Melbourne Home Cover: What to Check First

Updated 6 November 2026 · Standard formula, shown below

Before choosing Bank of Melbourne Home Cover, check the sum insured, building and contents limits, and the list of exclusions and optional extras to ensure the policy matches your property’s rebuild value and your possessions. This article explains the key factors to compare and the steps to take when evaluating this insurance product.

Background: What Bank of Melbourne Home Cover Is

Bank of Melbourne offers home and contents insurance underwritten by a third-party insurer (as is common for bank-sold insurance). The policy is designed to protect your home’s structure (building) and your belongings (contents) against events like fire, storm, theft, and accidental damage (if added). It is not a standalone product from the bank itself; instead, the bank acts as a distributor, so the actual terms are set by the underwriter. This means the cover can change if the underwriter changes, and you should read the Product Disclosure Statement (PDS) carefully.

How Bank of Melbourne Home Cover Works

You choose the level of cover for buildings and contents separately. The premium is paid annually or monthly, and in return, the insurer agrees to pay for repairs or replacement up to the sum insured, minus any excess you choose. Claims are lodged directly with the insurer, not through the bank’s branch staff. The policy includes standard events (like fire, storm, and theft) and allows you to add optional covers such as accidental damage, portable contents, and motor burnout. The sum insured is the maximum the insurer will pay for a single claim, so it must reflect the full rebuild cost of your home and the total value of your contents.

What to Check Before Choosing the Policy

When comparing Bank of Melbourne Home Cover against other policies, focus on these specific points:

Sum insured for buildings: This must cover the full cost to rebuild your home, not its market value. Use an online rebuild calculator or get a professional valuation. If the sum is too low, you may be underinsured and receive a reduced payout.
Contents limit and sub-limits: Check the maximum payout for single items (e.g., jewellery, bikes, computers). If you own items worth more than the sub-limit, you may need to list them separately or increase the limit.
Excess amount: A higher excess lowers your premium but increases your out-of-pocket cost per claim. Choose an excess you can afford to pay if you make a claim.
Optional extras: Decide whether you need accidental damage cover, portable contents cover (for items outside the home), or motor burnout cover. These add cost but may be essential for your situation.
Exclusions: Read the PDS to know what is not covered, such as wear and tear, gradual damage, or certain types of water damage. If a risk is excluded, you may need a separate policy.
Claim process and time limits: Check how long you have to lodge a claim and what documentation is required. Some policies require claims within a set period (e.g., 30 days).

Common Problems and How to Avoid Them

One frequent issue is underinsurance. Homeowners often insure for the market value of their home, but the rebuild cost can be significantly higher due to demolition, debris removal, and building standards. Another common problem is misunderstanding the difference between ‘replacement value’ and ‘market value’ for contents. The insurer will pay to replace items with new equivalents, but if you have old items, the payout may be less than what you paid. Additionally, some claims are rejected because the damage was gradual (e.g., a slow leak) rather than sudden. To avoid these issues, review your policy annually, update your sums insured after renovations, and keep receipts and photos of your belongings.

Comparing Bank of Melbourne Home Cover with Other Policies

When comparing, look beyond the premium. Compare the following:

Sum insured limits: Some policies offer ‘unlimited’ contents cover, while others have a cap.
Sub-limits for valuable items: A policy with a low single-item limit may be cheaper but inadequate for your needs.
Optional extras: The cost and scope of accidental damage cover vary widely.
Excess structure: Some policies have a single excess, others have different excesses for different events (e.g., storm vs. theft).
Claim service: Check reviews or ask about average claim turnaround times, but be aware that individual experiences vary.

Bank of Melbourne Home Cover is often bundled with a bank account, which may give a discount, but always compare the total cost and cover against standalone insurers.

Costs and Discounts

The premium is influenced by your location, the rebuild cost, the excess you choose, and the optional covers you add. Bank of Melbourne may offer a discount for bundling with a home loan or for paying annually. However, the cheapest policy is not always the best value if it has lower limits or more exclusions. Always calculate the total cost per year, including any excess you might pay if you claim, and compare that with the level of cover provided.

Safety and Accuracy Tips

To avoid disputes at claim time, keep a home inventory with photos, receipts, and serial numbers. Store a copy outside your home (e.g., in a cloud service). When calculating the rebuild cost, use a reliable calculator that accounts for current building material prices and your home’s specific features (e.g., double brick, tiled roof). Do not guess the value – get a professional estimate if your home is unusual or large. Also, check the policy’s ‘duty of disclosure’ – you must inform the insurer of any material facts (like previous claims or renovations) or your policy may be voided.

Frequently Asked Questions

Is Bank of Melbourne Home Cover the same as a bank guarantee?

No. Home Cover is an insurance policy, not a bank guarantee. It pays out for covered events, whereas a bank guarantee is a financial instrument for a loan. They serve completely different purposes.

Can I increase my sum insured after a renovation?

Yes, you can usually increase your sum insured at any time by contacting the insurer. However, the increase may be subject to underwriting and may affect your premium. It is best to update your policy immediately after any renovation that increases the rebuild cost.

Does the policy cover damage from storms?

Yes, storm damage is typically a standard covered event, but check the PDS for specific definitions. Some policies exclude damage from floods (which is usually a separate cover) and may have special excesses for storm claims.

What happens if I make a claim?

You contact the insurer’s claims line (details in your PDS), provide the required information and evidence, and an assessor will review the damage. If approved, the insurer will arrange for repair or replacement up to your sum insured, minus your excess.

Can I cancel the policy at any time?

Yes, you can cancel your policy at any time, but you may be charged a cancellation fee or not receive a full refund of the premium for the unused period. Check the PDS for the cancellation terms.

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