The risk of underinsurance

When it’s time to renew your policy, many are guided by the cheapest premium without realising just how costly that mistake can be.

How to avoid underinsuring your home

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 home and contents 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.
 
Online tools such as our home & contents calculators can be useful in giving you an estimate of what your home and belongings are worth1. You can also call us on 13 24 81 to find out more.

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.