Underinsuring your home and possessions may save you a small amount of money in the short term but it can also mean you will have to pay far more to replace or repair damage. Cheaper premiums often mean less coverage and lower payouts.
Some people underinsure because they don’t review their insurance needs and replaceable contents yearly, which places them at risk of a low payout after damage or loss.
Every year our homes and contents increase in value from additions to the home, buying new appliances to additions to your special collection or wardrobe. Many people forget to include the new additions to their policy, which results in being underinsured.
People often forget to include their special collections, art and antiques as specific items in their insurance policies, which also contributes to underinsurance. The best scenario is to arrange an independent valuation to determine an accurate replacement cost.
If you’re a homeowner, it’s also recommended to have a builder inspect your home every five years to determine a rebuild cost. This isn’t the same as the cost of a house for sale elsewhere but an estimate tailored to your home, the materials used and unique construction and takes into account fencing, sheds, pools and even fountains.
This is why it is important to calculate the replacement cost of what you own and review your policies yearly. Because as the years go on, your needs will change – so make sure you have the right policy to change with you.
Use our Home & Contents Calculators to estimate your replacement cost needs or call us on to find out more .