Will my home insurance cover finding and fixing a hidden water leak in Australia?

A hidden water leak strikes fear into any homeowner’s heart. Not only can it quietly rack up thousands of dollars in damage, but the question lingers: will home insurance help cover the costs of both finding and fixing the issue? Here’s a simple guide for Australian households, packed with facts, clear explanations and practical steps to take when leaks threaten to wash away peace of mind.

Your Product Disclosure Statement (PDS)

Every home insurance policy in Australia has a Product Disclosure Statement (PDS). This official document outlines what’s covered, what’s not and the fine print behind each type of claim.

• The PDS can be found on the insurer’s website, emailed to policyholders at sign up or requested.
• Look for sections labelled “Escape of Liquid”, “Trace and Access” and exclusions for “gradual damage”, “wear and tear” or “maintenance”.

Insurers may interpret policy terms differently so don’t assume. Check the PDS is the only way to be sure about cover for leaks.

What is “Trace and Access”?

”Trace and access” is insurance speak for paying for the cost to find the source of the leak – especially if it’s inside walls, under flooring or ceilings.

• This might include thermal imaging, cutting through plasterboard or lifting tiles to find problem pipes.
• Most policies pay for the tracing work and making surfaces accessible for repair but won’t pay for the repair of the faulty pipe or fitting itself.

Here’s how some insurers compare:

Insurer	Trace and Access Included	Repair of Source Included	Typical Limit
Budget Direct	Yes	No	$5,000
GIO	Yes	No	$5,000
Allianz	Yes	No	$5,000
Suncorp	Yes	No	$5,000

Check your own PDS for specific limits and inclusions.

“Escape of Liquid” vs “Gradual Damage”

Insurers love to differentiate leaks by their cause – fast and sudden gets covered, slow and sneaky doesn’t.

• “Escape of liquid” means water has rapidly and accidentally escaped from where it’s supposed to be – think a pipe suddenly bursting, a washing machine hose flying off or a hidden pipe springing a big leak. Policies almost always cover the damage.* “Gradual damage” means leaks that develop slowly, perhaps due to corrosion, poor maintenance or a minor drip that’s ignored for weeks. This gets excluded by all major insurers so homeowners are responsible for repairs.

Some facts:

• 54% of Australians with Home & Contents Insurance have made a claim and water damage is one of the top causes.
• The average water damage claim (not linked to natural disaster) is over $30,000 in Australia.
• Most insurers won’t pay for damage that could have been reasonably detected earlier so regular home maintenance is key.

Damage vs Repair: What’s Actually Covered?

Most policies don’t pay for the faulty pipe, fitting or appliance at the heart of the problem. Insurance covers the collateral damage – ruined carpets, swollen skirting boards and costly mould removal.

What’s Typically Covered	What’s Typically Not Covered
Damaged carpets, flooring	Cost of repairing defective pipe
Ruined walls, ceilings, plasterboard	Replacement parts for appliance
Mould remediation	Work due to poor home maintenance
Any structural water damage	Gradual, long-term leak repairs

If the leak happens suddenly (escape of liquid), both the investigation and resultant damage are usually covered but homeowners will face out-of-pocket costs for repair and plumbing – not always a small sum.

Actionable Checklist for Homeowners

See a wet patch or hear water running where there shouldn’t be any? Here’s what to do:

• Turn off the main water supply to limit further damage.
• Document everything – take clear photos, note times and every sign of water intrusion.
• Review your PDS, highlighting “trace and access”, “escape of liquid” and “gradual damage”.
• Contact the insurer before approving any major (non-emergency) repairs; they may require a visit or official assessment.
• Use precise language with the insurer – a “burst” pipe generally gets faster approval than a “leak” as claims teams look closely at wording to assess eligibility.

Helpful Table: Home Insurance Leak Coverage Quick Reference

Home Insurance Term	Trace & Access Costs	Repair of Leak Source	Resultant Damage Cover	Usual Exclusions
Escape of Liquid	Yes	No	Yes	Gradual leaks, poor upkeep
Trace and Access	Yes	No	Yes	Parts/fittings at fault
Gradual Damage	No	No	No	Rust, corrosion, slow leaks
Accidental Burst Pipe	Yes	No	Yes

Extra Tips: Prevent Problems Before They Start

• Check plumbing regularly: inspect hoses, pipes and taps for signs of wear or corrosion.
• Replace flexible hoses every 5 years and check every 6 months.
• Install smart leak detection devices or water meters that alert to hidden leaks.
• Get a qualified plumber’s report to support a claim especially if the insurer requires proof the damage was sudden not gradual.

Key Takeaways

• Home insurance in Australia covers the cost of finding a hidden leak (“trace and access”) but rarely pays to fix the pipe or faulty part itself.
• Water damage cover depends on whether the event is sudden and accidental (“escape of liquid”) or gradual which is commonly excluded.
• Insurers will pay for repairs to the resultant damage (walls, carpets, mould treatment) but expect you to pay for plumbing repairs out-of-pocket.
• Claims rely on what’s in the Product Disclosure Statement (PDS) – check this document for each policy.
• Document damage quickly and accurately, use the right words and talk to the insurer before starting repairs.
• Prevention is key: maintain plumbing proactively and consider installing smart leak devices to save thousands in future water damage.