Unfortunately, Australia is one of the most underinsured nations in the world. This is especially the case when it comes to home and building insurance and the 2014 Understand Home Insurance Research Report showed that one in ten Australians have their homes insured according to an out of date purchase price.
When it comes to protecting yourself financially, it’s essential that your commercial and/or residential property is adequately covered by building insurance.
What is building insurance?
Building insurance is designed to cover the permanent fixtures in your building or house. This includes things like the roof, ceiling, walls, floors, doors, windows, fixed cabinets and cupboards. Additional structures such as sheds and pergolas are also generally covered but it’s best to check this with the insurer.
Generally, your building insurance will provide cover for events such as:
- Storm damage
- Lightning strikes
- Breakage of fixed Glass
- Impact from falling trees
It’s important to remember that inclusions on your building insurance will differ depending on the policy and provider whilst some risks are optional extras which need to be added. For example CGU automatically covers food but other providers only include this as an optional add on. Make sure you have a close read of the Product Disclosure Statement (PDS) so you know exactly what’s covered and what’s not. This means you won’t have any surprises at claim time.
Whether you own a commercial property or a residential home, you need to ensure you have building insurance place. In many instances, your building insurance can be combined with your contents insurance.
How can you avoid underinsurance?
To avoid underinsurance of your property, you need to ensure that you keep your building insurance policy up to date. Remember to inform your insurer of any changes to your home such as renovations, or additions. Also remember that the price of building costs go up with time, so it’s great to review your policy often to determine if the insured amount needs to be raised. It’s a good idea to consider how much it would cost to replace your home brick for brick.
Another thing to consider is whether the area in which you live is at high risk of events such as flooding. Don’t assume that your building insurance will cover these risks as policies vary and you may need additional cover. Speak to your insurer about your situation to ensure that you have the right level of cover in place.
It can be difficult to determine how much it can cost to replace your home. At CGU, we can help take the guesswork out with our Home Building Calculator. Additionally, you also need to take into account other elements such as location access for builders, materials used to re-build, and the current market costs.
If you require more information regarding insurance for your business, contact CGU today.