An ME Bank report also found that 1 in 4 households have less than $1,000 in savings. This raises the question how Australian families would fare financially in unexpected times of need, and highlights the importance of adequate home and contents insurance coverage.
In addition, as costs to build rise, this further increases the gap between insurance levels and property rebuild costs. Add to this the rising value of items within the home due to new gadgets and devices being released and purchased, many homes are being set up for loss should the worst-case scenario occur.
Make sure you’re in a strong position to rebuild and replace your belongings should you suffer an insured loss with the simple advice below.
Are you underinsured?
If your claim exceeds the amount you are insured for by your policy, you will be underinsured. Underinsurance is a threat to how well you could bounce back after an insured event occurs.
Online tools, such as our home and contents calculators can be useful in giving you an idea of the amount of insurance coverage you need1.
To ensure you are adequately insured, it’s important to find out first how much your home and contents is worth, and then match the insured amount to this.
Steps to making sure you are not underinsured
Take it room by room when determining the value of your contents. List out each room in your home, including the sheds and outbuildings, and add up the value of everything inside them. This includes everyday items which, when added up, will cost surprisingly more than you’d estimate to replace.
When it comes to your home insurance, calculate based on what it would cost to rebuild your house to the same standard.
Online tools such as our online calculators can be useful in giving you an idea of your replacement cost estimates1 and can take into account elements such as your block elevation, your home style, the age of the property, and the finishes and fixtures.
Things such as decking, garages, heating and cooling systems, pergolas, and outbuildings all need to be considered when calculating rebuilding costs. Likewise, if your block is on a slope, this can add to rebuilding costs too.
You can use an independent surveyor, a builder or an architect to help you with establishing an accurate cost for rebuilding your home too.
Also keep your insurer up to date with any renovations, building additions, and upgrades. If you’ve recently added new fixtures to your home, built a gazebo, installed a pool, or added a second storey to your home for example, you must let your insurer know so that your policy can be adjusted to reflect your property’s increased value.
Could you be underinsured right now?
You could be underinsured right now if you have not reviewed your insurance each year, if you have made additions to your home and not updated your policy, if you have under-valued your home and contents, and if you have not considered the costs of rebuilding, demolition, and removal of debris.
Luckily, CGU’s building cover will automatically cover 10% of your buildings sum insured extra towards rebuilding fees and debris removal at no extra cost to your premium.
Don’t get caught out by underinsurance
Make sure to take account of item limitations within your policy, and take out additional insurance for extra-valuable items if needed.
It’s important to ensure you are not underinsured and struggling should something happen to your home or contents. Don’t get stuck in the trap of paying less premium right now only to lose out later. Ensuring you’re not underinsured now means you can enjoy a lifestyle and standard of living just like you have now should an insured loss occur.
Read your Product Disclosure Statements thoroughly in order to fully understand what is covered and what is not. For more information about Home and Contents Insurance, contact CGU today on 13 24 81.
Things you should know
1 Building and contents calculators are provided by CoreLogic and should only be used as a guide. These calculators' estimates may be different than estimates you get during your quote. We do not guarantee the accuracy or currency of the estimates.