Are You Covered for a Disaster by Your Insurance?

insuranceSo far, it’s been a wild year, with January offering up bushfires in the west and flooding in the east.  When was the last time you checked your insurance policy, to make sure it’s up-to-date and be 100% certain of exactly what it covers?


ASIC’s Senior Executive Leader Financial Literacy, Delia Rickard, suggests checking your policy or contacting your insurer and asking them exactly what events you’re covered for and what’s excluded, for example: damage from flooding!

“Some home and contents policies may not cover damage from floods, or may have caps on how much you can claim for flooding and other events,” says Ms Rickard.

`Make sure you have enough home insurance cover by using online calculators on insurance websites to estimate the total cost of rebuilding your home. Try a couple of calculators to compare because the results can differ. Be sure to shop around for appropriate cover and quotes. Phone potential insurers, and ask lots of questions,” she advises.

Home insurance policies are usually either `sum-insured’, `extended replacement cover’ or `total replacement’ policies.

Sum-insured cover is more common and will cover you up to a set amount that you choose. Extended replacement cover policies have a sum-insured amount, but will provide a limited amount of extended cover in the event of a total loss. Total replacement cover covers the costs to rebuild your home to the standard it was prior to the event, thus significantly reducing the risk of being underinsured.

There are a number of variations to these basic models, so read the fine print and ask as many questions as possible when comparing insurers. The key is to be sure your policy covers all the costs of rebuilding your home.

If you are renting, you should consider insuring the valuable items that you couldn’t afford to replace, such as your car, boat, tools of trade, and expensive home contents.

See the insurance articles at for more details.


Source : Quartile Property Network (3 February 2012)

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