Granny flat insurance claims in Victoria: what is covered

Before you touch anything

The evidence tick-off list, in the order a claim needs it

Work down this list before you repair, dry out, or throw anything away. Ticks are saved in your browser, so you can do the photos now and the paperwork tonight. Print it and take it out to the flat with you.

First 30 minutes, before anything is moved

Wide shot of the whole granny flat from four sides, so the assessor can see the building and its setting.
A short video walking through the inside, narrating what you can see and the time and date.
Close-ups of the entry point: the broken tile, the split flexi hose, the lifted flashing, the fallen branch.
Photograph the water line on the wall with a tape measure in shot, so the height is provable.
Photograph the ceiling stain, the wet carpet edge and inside any cupboard that got wet.

Measure and record

Floor area affected in square metres, room by room. A 45 square metre flat with 30 square metres wet is a very different claim to 5.
Depth of water at the deepest point, in millimetres.
Write down the exact time the damage started, or when it was first noticed, and by whom.
Save a Bureau of Meteorology observation or weather warning for that date if a storm is the cause.
Note whether the flat was occupied, tenanted or empty at the time.

Keep, do not throw out

The failed part itself: the burst flexi hose, the cracked fitting, the corroded valve. It is the proof of cause.
A sample of the damaged floor covering and a cut-out of the wet plasterboard, bagged and labelled.
Damaged contents photographed in place before they go to the kerb, with model numbers where you can read them.
Any receipts, warranties or manuals for damaged appliances and fittings.
The make-safe invoice, itemised separately from the repair quote.

Paperwork the insurer will ask for

Your policy number, the excess amount and the current building sum insured.
The building permit and occupancy permit for the granny flat, and the builder registration number.
An itemised scope of works from a registered builder, priced line by line, not a lump sum.
A written cause-of-damage opinion from the trade who attended, dated on the day.
Maintenance evidence: gutter cleaning, roof inspections, plumbing services. This is what defeats a wear-and-tear knockback.
If tenanted, the lease, the condition report and the tenant written report of the incident.

Red flags that get a claim reduced or refused

You cleaned up and threw everything out before photographing it.
The granny flat is not named on the policy, or the sum insured has never been reviewed.
There is no building permit or occupancy permit for the structure.
The flat is rented out on a standard home policy instead of landlord cover.
Gutters were full, the roof was rusted, or the silicone had failed years ago. That is a maintenance exclusion.
You started full repairs before the assessor attended and without written authority.

Covered event versus wear and tear, in plain words

Every home policy in Australia insures events, not conditions. A covered event has a date: the storm on Tuesday night, the branch that came down, the pipe that burst, the car that reversed into the wall. Wear and tear has no date, because it has been happening slowly: the roof screws corroding on a Seaford block a few hundred metres from the water, the shower silicone that perished four years ago and has been quietly wetting the wall frame ever since, the rusted gutter that has been overflowing into the eaves every winter.

This distinction is why a claim can be refused even though the damage is real and expensive. The classic Frankston example is a wet bathroom wall. If a flexi hose split on Saturday, that is a covered event and the repair is paid. If the shower has been leaking through failed waterproofing for two years, the wall is just as wet and the repair is just as costly, but it is excluded as gradual damage and lack of maintenance. Most insurers will still pay for the resulting damage from an escape of water even where the failed part itself is not covered, so ask specifically about that split rather than accepting a blanket no.

There is a third category worth knowing: storm versus flood. Rainwater entering through a damaged roof is storm. Water rising off the ground and running in under the door is often classified as flood or as stormwater runoff, and cover for it varies enormously between policies. On the flat, sandy blocks around Seaford and Carrum Downs and the low-lying parts of Frankston, this is the difference that decides the claim. Check your product disclosure statement for the flood definition before you need it, not after.

Is your granny flat even on the policy? The most expensive question here

Most Victorian home policies cover the main dwelling for a stated sum insured and then cover outbuildings, sheds, carports and other structures under a sub-limit, commonly 10 to 20 per cent of the building sum. On a $600,000 building sum that is $60,000 to $120,000. A 60 square metre two-bedroom granny flat in Frankston costs $145,000 to $220,000 to rebuild in 2026, and rebuilding it to current NCC 2022 and 7-star NatHERS requirements costs more than the original build did. Owners routinely discover that gap only after a fire or a storm.

Three phone calls fix it. Ask the insurer to list the granny flat as a named additional structure with its own floor area and construction type. Give them a realistic rebuild figure, not what you paid, and remember that demolition, site access for a rear-of-block build, and permit fees all form part of a rebuild. If the flat is tenanted, or you plan to tenant it, move to landlord cover: a standard home policy will not cover tenant-caused damage, loss of rent, or your liability as a rental provider. Landlord cover in this market usually adds $250 to $600 a year on top of a home policy. Our Victorian landlord rules page covers the rest of the obligations that come with tenanting a second dwelling.

If the flat is one you are still building, a different insurance applies. Domestic building insurance is required in Victoria for domestic building work over the state threshold, and it is not a general warranty: it responds only if the builder dies, disappears or becomes insolvent, and it covers structural defects for six years and non-structural defects for two years from completion. Ask any builder to produce their certificate before you pay a deposit. The quote comparison page explains exactly what to check.

Make-safe, excess, and the assessor

Make-safe is the emergency work that stops the damage getting worse: a tarp on the roof, a board-up, power isolated, water extracted, dryers running. Almost every policy allows reasonable make-safe without waiting for approval, typically to a limit somewhere between $1,000 and $5,000. It generally sits inside the claim rather than on top of it, so keep the invoice itemised and separate from the repair quote. Take photos before and after the make-safe as well. The first-hour emergency page sets out what to do while you wait.

Excess in 2026 is commonly $500 to $1,500 for a standard home policy, with higher optional excesses of $2,000 to $5,000 in exchange for a lower premium, and separate higher excesses for storm or flood on some products. Do the arithmetic before you lodge. If the repair is $1,800 and the excess is $1,000, you are claiming $800 and buying a claim record that commonly adds 10 to 20 per cent to renewals for five years. On a $1,800 policy that is $180 to $360 a year, so the claim can genuinely cost you money.

The assessor usually attends within two to ten business days on a non-urgent claim, faster after a widespread storm event only if you are early in the queue. Their job is to confirm the cause and agree a scope of works. Be there. Walk them through the damage, hand them the photos and the dated trade opinion, and ask them to write the scope in the room. Most disputes are not about whether the damage is covered, they are about what is in the scope: whether the whole floor is replaced or only the wet half, whether the entire wall is repainted or just the patched section, whether the insulation is renewed. Argue the scope early, in writing, because it is far harder to reopen later.

Cash settlement versus insurer-managed repair, and the trap in each

A cash settlement pays you a figure and closes the claim. You choose the builder and you can spend the money how you like. The trap is that the figure is normally calculated at the insurer repair-network rate, which commonly sits 15 to 30 per cent below what a retail builder charges for the same scope. On a $30,000 scope, that is $4,500 to $9,000 out of your pocket. Once accepted, the claim is closed, so anything found later when the lining comes off is yours.

An insurer-managed repair gives you their builder and their warranty on the work, usually for a stated period. The trap is that you get their scope and their timeline, and small jobs at network rates sit at the back of the queue. If the scope is right, take the managed repair, because the warranty has real value. If the scope is wrong, fix the scope first. Never accept a cash figure on the same phone call you first hear it.

What an insurer typically asks a builder to supply

An itemised scope priced line by line, with quantities in square metres or linear metres, not a lump sum.
A written cause-of-damage opinion, dated the day of attendance, stating what failed and why.
Photos matched to the scope items.
Builder registration details, public liability certificate of currency and, where required, domestic building insurance.
Separate figures for make-safe, for the repair, and for any code upgrade the rebuild triggers.
A statement of what is not included, so the assessor cannot assume it away.

The honest advice: often, do not claim

We say this to owners most weeks. If the repair is under about $2,500 and your excess is $500 to $1,500, claiming is usually the wrong move. You pay most of it anyway, you carry a claim on your record for five years, and the renewal loading can quietly cost more than the claim paid. Pay for the $1,200 repair, keep the record clean, and save the claim for the event that actually needs it.

Claim when the number is real: a storm-damaged roof at $12,000, a flooded flat at $18,000, a fire, an impact, or anything where liability to a tenant or a neighbour is involved. And claim promptly, because most policies require notification as soon as reasonably possible and delay is one of the easiest reasons for an insurer to reduce a payout.

What we do not do: we are builders, not insurance brokers or loss assessors, and we will not tell you your policy covers something. We write the scope, we state the cause honestly even when it is maintenance rather than a storm, and we do the repair. If the honest cause is wear and tear, we will say so in writing, because a scope that misstates a cause is fraud and it puts your whole policy at risk. If you want someone to argue the claim for you, that is a loss assessor, and on a large claim they are worth the fee.

Prevention is cheaper than any of this. Most granny flat claims we see trace back to gutters, drainage or silicone. Our maintenance schedule and the backyard drainage page cover both, and the hiring checklist covers what to demand from any builder before you sign.

Get a price

Get an itemised repair scope your insurer can actually process

Send the details and we will book an inspection, then email a line-by-line scope and price within 3 business days.

Questions owners ask before they lodge

Is my granny flat covered by my normal home insurance in Victoria?

Not automatically. Most Victorian home policies treat a granny flat as a separate structure or an outbuilding, and many cap that cover at 10 to 20 per cent of the building sum insured, which on a $600,000 building sum is $60,000 to $120,000 against a granny flat that costs $150,000 to rebuild. Ring your insurer, have the flat listed by name and floor area, and get the sum insured lifted to a real rebuild figure.

What is the difference between storm damage and gradual damage?

A covered event is sudden and identifiable: a storm on a particular night, a fallen branch, a burst pipe, an impact, a fire. Gradual damage is rust, rot, perished silicone, a leak that has been weeping for months, or mould from poor ventilation, and almost every Australian home policy excludes it. The same wet wall can be either, which is why the date and the cause matter more than the damage itself.

What is a make-safe and who pays for it?

A make-safe is the emergency work that stops the damage getting worse: a tarp, a board-up, isolating power, extracting water and starting the dryers. Most Victorian home policies pay for reasonable make-safe work without pre-approval, typically up to $1,000 to $5,000, and it usually sits inside your claim rather than on top of it. Keep the invoice itemised and separate from the repair quote.

When should I not claim on my granny flat?

If the repair is under about $2,500 and your excess is $500 to $1,500, a claim rarely makes sense. You pay the excess, you carry the claim on your record for five years, and a claim history commonly adds 10 to 20 per cent to renewal premiums, which on a $1,800 policy is $180 to $360 a year. Pay for a $1,200 repair yourself and keep the record clean.

Cash settlement or insurer-managed repair: which is better?

Cash settlement gives you control and lets you choose your own builder, but the figure is usually calculated at the insurer network repair rate, which commonly runs 15 to 30 per cent below a retail builder quote, and once you accept it the claim is closed. An insurer-managed repair carries a warranty from the insurer but you get their builder and their scope. If the scope is right, take the managed repair; if the scope misses things, negotiate the scope before you discuss cash.

Does an unapproved granny flat affect a claim?

It can, badly. If the flat was built without a building permit or has no occupancy permit, an insurer can reduce or decline a claim on the grounds the structure was not lawfully built, and a rebuild has to meet current NCC 2022 and 7-star NatHERS standards anyway. Getting retrospective approval costs $4,500 to $18,000, which is far less than an uninsured $150,000 structure.

Will home insurance pay to repair your granny flat in Victoria? What is covered and what is not