As many as seven in ten Australian homeowners risk being left thousands of dollars out of pocket because they have failed to adequately insure their homes and contents.
A survey conducted by Suncorp and Reed Construction Data has determined homes were underinsured by an average 20 percent - equivalent to $65,000 for a house valued at $325,000.
Sarah Dale, ResCom’s Insurance Broker & Manager, describes the extent of residential property underinsurance as “alarming”.
“People generally take out insurance for their homes and contents with the best of intentions,” she says. “But they tend to forget about their insurance policies and valuations at key stages.”
If you’re planning a renovation or extension, have bought some new expensive furniture, white goods or electronic equipment, or you’re adding a swimming pool, Sarah recommends a quick call to your insurance broker.
“Unfortunately, if the worst does happen many homeowners are not as covered as they’d anticipated,” she adds. “If your home burns down, for example, are you sure that everything is covered?”
The Canberra bushfires in 2003 graphically illustrated the terrible hardships that can be caused by underinsurance, but many Australians still fail to minimise their exposure to underinsurance by putting the right asset protection in place.
Sarah advises that homeowners follow some commonsense steps when it comes to making sure they are properly insured.
“Your home is probably your biggest asset,” she says. “The cost of rebuilding, repairing or replacing things is something that you shouldn’t have to loose sleep over.”
Are you protected? Sarah’s Tips:
- Have your property valued on a regular basis so you’re up to date with market movements.
- Audit your contents annually so that the new plasma TV or computer is added in to your policy – use the Contents Calculator on the ResCom website (rescom.com.au) as a guide.
- Consider whether or not you want the valuations in your policy linked to CPI increases.
- If you buy a house, insure it as soon as you sign the contract or pay a deposit as at this time you have an insurable interest. Some vendors may let insurance lapse once they’ve sold – don’t be caught short before you even move in.
- Check the terms of your insurance policy to know exactly what you are and aren’t covered for.
- Choose an insurance broker, like ResCom Insurance, who will speak to you each year at policy renewal time to make sure you are comfortable with your cover.
To decide if an insurance product is right for you, please carefully read the Product Disclosure Statements, which are available by phoning ResCom on (03) 8699 8040.