Cash Settlement

What is a home insurance Cash Settlement?

A home insurance Cash Settlement involves Defence Service Homes Insurance paying you, either in part or in full, for the quoted repairs, rather than replacing or repairing damage to your building.

How cash settlements work

A cash settlement is an amount of money we offer to settle your claim.  We can settle some or your entire insurance claim using a cash settlement.

We will explain the basis for the dollar amount of the cash settlement we offer you.
You are free to get your own quotes to estimate how much it would cost to repair or rebuild your property and provide them to us as part of the cash settlement process. If you can, you may wish to obtain more than one quote.

Can I request a Cash Settlement for my claim?

Yes, you have the option to choose Cash Settlement for your claim subject to terms of your policy and policy limits. The Cash Settlement will be based on the assessed quote for repairs, less any applicable deductions.

Why you may receive a cash settlement

Common reasons for cash settlements include:

  • you have chosen to request a cash settlement to settle your insurance claim
  • it is unsafe to repair or rebuild your home
  • the local authority will not allow you to repair or rebuild
  • we can only partially accept your claim. This may be because there is damage to your property that is not covered by your insurance, which first needs to be fixed by you.
  • your insurance does not cover the amount of money it will take to repair or rebuild your home to today’s building standards. And it is not possible for us to repair or rebuild your home, having explored available options with you for you to pay the difference.

Important things to keep in mind with cash settlements

If you have a mortgage over your home, it’s a good idea to talk to your lender about how the money from a cash settlement has to be used. A lender can require the insurance payout be used to pay down your mortgage or require that they approve repairs before they are completed.

  • you are responsibility for arranging and co-ordinating all the builders and tradespeople
  • you will become the project manager for fixing your property, unless you arrange & pay for one;
  • any delay in the repair of your property may bring about additional damage that could increase the cost of repair. This will be your responsibility.
  • After a natural disaster, there can be greater demand for builders and other tradespeople. You could find the cost of fixing your property increases, or there might be delays in the time it takes to fix your home.

How does Cash Settlement affect the guarantee of the repair?

The quality, cost and timeliness of your repairs will not be guaranteed by us.

If you accept a Cash Settlement, Defence Service Homes Insurance does not guarantee the quality of the repairs. Therefore, if there is a fault with the repair work, you will need to seek rectification from the builder you appointed to conduct the work.

Do I have to repair my house with the Cash Settlement?

You are entitled to spend the cash settlement in any way that you choose. However, you may have limited policy coverage if the damage remains unrepaired. If your home is damaged in the future, and you have failed to repair the previous damage that you have been cash settled for, Defence Service Homes Insurance will consider whether this damage would be covered as part of any future claims.

Further Questions?

If you have any further questions in relation to cash settlements, please contact our office on 1300 552 662 or email