You discover asbestos in your walls during a renovation. The removal quote comes in at several thousand dollars. Your first thought: “Surely my home insurance covers this.”
In most cases, it does not. And the reasons why are buried in policy exclusion clauses that very few homeowners read before they need them.
Asbestos and home insurance have a complicated relationship in Australia. Some scenarios are covered, many are not, and the line between the two is drawn in language that is easy to misinterpret. Understanding where your policy stands before you need to make a claim can save you from a financial surprise at the worst possible time.
The Standard Position
Most home and contents insurance policies in Australia exclude asbestos-related costs from standard coverage. This includes the cost of asbestos testing, removal, disposal, and any remediation or decontamination work.
The exclusion typically appears in the policy’s general exclusions section, often worded along the lines of: “We do not cover loss, damage, or liability arising from or connected with the presence of asbestos or asbestos-containing materials.”
This exclusion applies regardless of when the asbestos was installed, when it was discovered, or how long you have held the policy. If you buy a home that contains asbestos (which includes most Sydney homes built before 2003), the cost of managing that asbestos is your responsibility, not the insurer’s.
The logic from the insurer’s perspective is that asbestos is a pre-existing condition of the property. It was there when you bought the house. It was not caused by an insured event. Therefore, it falls outside the scope of the policy.
The Exceptions
While the standard position is exclusion, there are specific scenarios where asbestos-related costs may be partially or fully covered. These exceptions depend on your specific policy, your insurer, and the circumstances of the claim.
Storm Damage
If a storm damages a section of your home that contains asbestos, the cost of repairing the storm damage may include the cost of removing and replacing the asbestos material. For example, if a storm tears off your asbestos cement roof, the claim for roof replacement could include the cost of safely removing the asbestos debris and installing a new roof.
The key distinction here is that you are not claiming for “asbestos removal.” You are claiming for “storm damage repair,” and the asbestos removal is an incidental cost required to complete the repair. Not all insurers interpret this the same way, and some policies specifically carve out asbestos costs even from otherwise covered events.
Fire Damage
Similar to storm damage, if a fire damages a section of your home that contains asbestos, the repair costs may include asbestos removal. The fire is the insured event, and the asbestos removal is part of the repair scope.
Again, the coverage depends on your specific policy wording. Some insurers cover the full remediation cost. Others cap the asbestos-related component or exclude it entirely, even within a fire damage claim.
Accidental Damage
Some policies include accidental damage cover as a standard inclusion or optional extra. If asbestos is accidentally disturbed (for example, a tradesperson unknowingly cuts into an asbestos wall), the cost of decontamination and removal may be claimable under the accidental damage provision.
This is a grey area. Many insurers argue that asbestos disturbance during renovation is a foreseeable risk, not an accident, particularly if the homeowner did not get a pre-renovation asbestos inspection. The claim may be denied on the grounds that reasonable precautions were not taken.
Third-Party Liability
If asbestos from your property causes harm to a neighbour or visitor (for example, deteriorating asbestos fencing releases fibres into a neighbouring yard), your public liability cover may respond to a claim from the affected party. This does not cover your removal costs, but it may cover legal liability and damages claimed against you by the third party.
What Your Policy Almost Certainly Does Not Cover
To be clear about the boundaries: most home insurance policies do not cover the following asbestos-related costs.
Planned removal during a renovation is not covered. If you choose to renovate your home and discover asbestos in the process, the removal cost is part of your renovation budget. The insurer did not cause the renovation, and the asbestos was not caused by an insured event.
Testing and inspection costs are not covered. The cost of having your home assessed for asbestos, whether before a renovation or as a general precaution, is your responsibility.
Deterioration over time is not covered. If your asbestos eaves, fencing, or cladding deteriorate to the point where removal is necessary, that is classified as wear and tear or gradual deterioration, which is a standard exclusion in virtually all home insurance policies.
Council or regulatory orders are not covered. If a council or SafeWork NSW orders you to remove asbestos from your property due to its condition, the compliance cost is not an insured event.
Contamination cleanup is generally not covered. If asbestos fibres contaminate your home due to improper DIY removal, accidental disturbance, or deterioration of materials, the cost of professional decontamination is unlikely to be covered unless it results from a specific insured event (storm, fire, impact).
How to Check Your Policy
If you own a pre-2003 home in Sydney and are planning a renovation, check your insurance policy before you start. Specifically, look for these things.
Read the exclusions section. Search for “asbestos,” “hazardous materials,” “contamination,” and “pollution.” These are the terms that typically govern asbestos-related coverage.
Check the definitions section. Some policies define “accidental damage” narrowly, which can affect whether an asbestos discovery during renovation is considered accidental or foreseeable.
Call your insurer. Ask directly: “If I discover asbestos during a renovation, is any part of the removal or remediation cost covered under my policy?” Get the answer in writing if possible.
Review your sum insured. Even if asbestos costs are excluded from your standard cover, your sum insured for the building should reflect the full replacement cost of your home, including the cost of dealing with asbestos if the home were destroyed by an insured event. If your sum insured does not account for asbestos, you may be underinsured.
What This Means for Your Renovation Budget
The practical takeaway is that asbestos removal should be treated as a line item in your renovation budget, not as an insurance claim. Plan for it. Budget for it. Get quotes before you start.
A pre-renovation asbestos inspection gives you the information you need to include removal costs in your planning. Without it, you are budgeting blind and hoping for the best.
The cost of removal varies depending on the type of asbestos (friable vs non-friable), the volume of material, the access conditions, and the disposal requirements. Getting a detailed quote from a licensed contractor before you finalise your renovation budget is the smartest move you can make.
And here is the part that many homeowners miss: the removal cost is only half the equation. After asbestos is stripped from your walls, ceilings, or eaves, those surfaces need to be rebuilt. New sheeting, finishing, and painting are all additional costs that sit on top of the removal quote.
Most asbestos removal contractors do not do carpentry. That means a second contractor, a second quote, and a scheduling gap between removal and restoration. Rosemont Contractors handles both. We hold an asbestos removal licence (AD213403) and a carpentry licence (398318C), so the removal and restoration are quoted and delivered as one project. You get one price for the full scope, which makes budgeting straightforward.
Do Not Assume You Are Covered
Check your policy, budget for asbestos removal as a renovation cost, and get a professional inspection before work begins. Rosemont Contractors provides asbestos inspections, testing, removal, and carpentry restoration across Sydney, the Northern Beaches, Central Coast, and Wollongong. Contact us for a free quote.