Is your home adequately insured?

Coles Financial Services 30th May 2015 in Home insurance

Most valuable asset

For many of us, our home is our most valuable asset. 

It’s only natural we want to insure our home and all the possessions in it. For peace of mind.

But how do you know if you have enough building and contents insurance? 

A reputable insurer will explain – in plain language – the details of the insurance policy you purchase and should be able to help you calculate the value of your assets.

Working out exactly how much insurance you need can be a challenge, but it’s certainly worth the effort. 

Firstly, let’s look at your house

The cost of building your house today is what you need to calculate. (Obviously, the land value is not included.)  If your house had to be completely rebuilt, what would it cost? Consider things like permits, removal of debris, temporary accommodation – even replacing the garden.

Contents insurance

Next, tally the replacement cost of your possessions. This is where people typically under-insure because they think, “this old table isn’t worth much” or “who would want to pinch this?”.

But the truth is, the old table and chairs may cost more than you realise to replace. 

You need to take note of any items that are particularly valuable or greater than the value most policies allow for, such as antiques, audio visual equipment or jewellery. 

Build a list of what you own and each item’s replacement value. It will be helpful if you need to make a claim. Make sure you’ve included everything.

Remember, be realistic in your valuations. And include everything you would need to replace if there was a fire, flood or robbery. 

Once you’re comfortable with your valuations, you can shop around for a competitive premium. But make sure you’re comparing apples with apples. That’s where a clearly written Product Disclosure Statement is important.

At first glance, two policies may appear to be the same but the excess or the limits for particular items may be different. It’s always handy to check the Key Fact Sheet that insurers must make available on their website. It will specify important inclusions and exclusions. 

Remember, getting the right cover protects your most precious belongings.

Tags: insurance home building contents replacement cost