There are a number of different features within the average home insurance policy and fusion insurance is usually one of them. In a nutshell, fusion insurance provides cover for the burning out of an electric motor in household appliances. This burnout may be the result of a myriad of causes, some of which may include electrical surges or faults.
To be eligible for fusion claims the item you are claiming for usually needs to be less than 15 years old depending on the policy. Because fusion insurance applies only to the “motor” component of the item concerned, any item you want to make a claim on will have to have a motor if your claim is going to be successful. Commonly, fusion claims are used for fridges, freezers, washing machines, clothes dryers and pool motors.
What’s the problem with making a fusion claim on home insurance?
None really, but if you have a piece of old equipment that suddenly breaks down it may be tempting to make a fusion claim, but there may be consequences that you should know about. When it comes to maintenance issues, often a fusion claim isn’t the best way to go.
When you make a fusion claim, only the motor part of the item that has been subject to fusion as attested to by a qualified repair/service person will be covered. This means that the rest of the item won’t be covered. If you were thinking to get a new fridge because of motor fusion, this is unlikely to happen under a typical fusion claim because the insurer will usually only pay out for the cost of the motor, not the entire fridge.
Making repeated minor fusion claims may also impact your standing with insurers and make it difficult for you to get well priced insurance in the future. Insurers judge your risk level by the number of claims you have made in the past. If you want to get the best deals and most comprehensive cover, a clean(ish) claims record will work in your favour.
When considering submitting a claim for fusion, we recommend most strongly that you read your Product Disclosure Statement (PDS), which will outline the nature and scope of cover you have purchased. If in doubt, you should always speak with your broker.