Whether you’ve added pricey items to refresh your home, renovated to add value, or just haven’t reviewed your policy in a while; it’s important to check-in on your home and contents insurance to make sure you’re not underinsured.
What does being ‘underinsured ‘mean?
Being underinsured means your policy cover will be unable to pay for the full costs to rebuild your home or replace the contents if something goes wrong. It’s important to remember that short-term savings on premiums could equal heartache when it comes to falling short of replacing your home and/or the contents in the future.
Underinsurance can happen if you have renewed your policy but not reviewed it to add any new or extra items to your home or structure. If you’ve made renovations and not contacted your insurer you may not have adequate insurance in place and be underinsured.
Underinsurance can also happen when a home and its contents is undervalued. It’s a good idea to check list all items within the home to determine a value. Whilst the home rebuild itself can be tricky to estimate, remember to consider costs of demolition, removal of debris and replacement of quality finishes.
How much should you be insured for?
Your insurance policy should cover the true value of your home to rebuild from scratch, as well as the value of all the items inside you home. To figure out this sum you could list out the contents of each room, and calculate what it would cost to replace these. Also, consider the rebuild costs and factors affecting this such as slope of land and matching the same finishes.
Are there any limits to the insurance?
We recommended you read and understand what is and isn’t covered in the policy you have in place also; such as limits for single items which may require their own policy to avoid underinsurance. Be careful to read your Product Disclosure Statement to fully understand the cover you have in place.