Among the many things highlighted by the recent tragic bushfire season has been the importance of adequate property insurance.
According to the Australian Bureau of Statistics, approximately 23% of all Australian homes have no insurance, while 83% of the remainder are underinsured.
If you are underinsured, your insurance policy will not cover the cost of rebuilding. It can leave you in a situation of a major shortfall with resulting financial hardship as you will simply receive a payout for the amount covered.
Many insurance companies offer calculators on their website which help you work out how much cover you may need. It is also important to consider additional costs such as demolition and debris removal and fees for architects and council.
The Insurance Council of Australia makes the following points:
• Don’t put off reassessing the value of your home and contents, vehicles and any outbuildings you have, and the level of cover you need to financially protect them
• Make sure valuable assets are adequately protected and ensure the sum insured matches the value of these assets
• Make sure you understand what coverage you have, as well as any exclusions that may be a part of your insurance policy. It is important to be aware of exclusions and to query any part of a policy you do not understand
Australia has a highly competitive general insurance market, which means you can shop around and find an insurance policy that best suits your individual circumstances
• Policyholders should prepare an inventory of their contents by undertaking a room-by-room evaluation of their assets
• Speak to your individual insurer; they will be able to help you calculate the value of your assets to ensure you have the right level of cover. To assist policyholders, the ICA also provides buildings and contents calculators, they are available here
• If you are concerned about the potential total loss of your property, speak to a reputable builder and get a quote for the cost of a complete rebuild. Once you have this, speak to your insurer and make sure your sum insured covers this cost.