Tips for Homeowners: How to Prevent Underinsurance

It's crucial to have proper insurance for your home and possessions, but have you assessed if your coverage is adequate? Research conducted by the Insurance Council of Australia indicates that a significant number of Australians may be underinsured, often due to underestimating the costs associated with rebuilding or replacing their property.

Your Building

When estimating your home insurance, a calculator takes into account various factors including your location, the size of your property, and the necessary materials and labour for reconstruction. It also considers often overlooked expenses like architect and surveyor fees, as well as debris removal costs.

Mortgage brokers and insurance advisers can be valuable resources when determining the appropriate insurance coverage for your home. They can assist in obtaining valuation reports that help estimate the value of your property, which in turn helps determine the right amount of insurance needed. By leveraging their expertise and access to relevant information, these professionals can guide you in making informed decisions about your home insurance coverage to ensure you are adequately protected.

Your Contents

When determining the appropriate amount of contents insurance, consider the quality, quantity, and value of your belongings, including any valuable personal items. It's important to note that standard contents insurance may not provide full coverage for high-value items like artwork and jewellery. To ensure maximum protection for these items, you may need to increase your coverage. Additionally, if you wish to have coverage for these items when you take them outside your home, consider adding portable contents cover to your policy.

Top Insights

When you insure your home and belongings, remember these important points: Review your sum insured every year because costs can change over time. When you renovate or buy new items, reassess your sum insured to ensure adequate coverage. Remember that the cost of rebuilding your home may be different from its real estate value.

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