LET’S begin your home insurance story with a happy ending. Always read the fine print.
Most complaints involving home and contents insurance come down to the policy holder thinking they were insured for things that weren’t covered – sometimes the entire house in natural disasters – and the only way to avoid this is to read the small print.
Hundreds of thousands of Australians don’t bother reading the terms and conditions of their home and contents policies, leaving themselves exposed to having insufficient insurance cover.
Financial services firm Canstar’s research analyst Lilith Bohler says it is vital consumers know what they are, and are not, covered for.
‘Make sure that the amount you are insured for reflects the true value of your property because if you are underinsured you may find that any future payout is limited,” Ms Bohler says.
‘Don’t forget to include the cost of any home improvements that you have made along the way such as the addition of a swimming pool or a garage.’
Reading the fine print can turn up a whole host of surprising conditions.
As an example, did you know that policies often do not cover events when a building is left unoccupied for more than 60 days?
And flood cover – you are rarely automatically covered for it.
Read the fine print – your home depends on it:
Home and contents insurance policies can be up to 40 or 50 pages long and hard to read. The things to look for are the ‘definitions’ and the ‘exclusions’ which spell out what is covered and what is not covered.
Does your insurance policy cover flood damage? Do you have full replacement or fixed price cover?
The distinction between a home damaged by flood waters and homes damaged by storm water could be the difference between a payout and getting nothing.
Many insurance policies do not provide cover for flood damage – loosely defined as water flowing from rivers, creeks, dams, lake or reservoirs – but do provide coverage for storm water damage.
If you ever need to rebuild your house, here are ‘supplementary’ costs to include:
Alternative accommodation while your house is rebuilt.
Removal of debris from the site.
Architects or other professionals to draw up plans.
Services to make your property safe for workers.
Lodging plans with your local council.
Adequate contents insurance:
Keep receipts of household goods for proof of ownership. This includes furniture, clothes, appliances and jewellery.
When working out how much home and contents insurance you need, start by listing all your belongings and working out how much it would cost to replace them.
Taking photos and doing it room by room is sensible because you may be surprised by how much you have.
Combat premium hikes:
Ask for a loyalty discount.
It’s often cheaper to pay their premium annually rather than monthly
Choose a higher excess if you can afford it.
Discount for safety features.
Don’t just pay your renewal.
There are more than 120 licenced insurers operating nationwide so consumers are urged to hunt around for a good deal.
A new campaign, the Big Insurance Switch, launched this week aims to help you lower your living costs by tackling soaring home insurance premiums.
Research has found that home and contents insurance premiums have been growing at a much faster rate than wages, yet many people take little notice of their policies, what they pay and what is covered. If you’re serious about getting ahead financially, it’s time to cut out the complacency.
You can join the campaign for lower insurance costs here . One Big Switch will negotiate with insurance providers and aims to use readers’ combined weight of numbers to get a good deal.
It’s a free service and you are under no obligation to apply for any deal presented during the campaign.
News Corporation Australia will earn a commission for every person who successfully applies for an insurance policy generated by the campaign so will One Big Switch.