For most Australians the family home is the largest asset they’ll ever own. This means it’s essential to protect it now with the right insurance cover. After all, no one wants to discover they’re inadequately insured when it’s too late.
Home insurance covers material damage to your house from events such as fire, lightning, explosion/implosion, destruction or damage caused by aerial devices, as well natural events like earthquakes, storms, cyclones, floods, storms, rainwater, wind, hail, snow and bushfires. It’s also important to ensure your policy wording includes cover for ‘accidental loss and damage’ as some insurers only cover accidental damage without covering accidental loss, which can exclude many losses such as lost jewellery.
Some of the key things to consider when taking out Home Insurance include:
- What level of cover is being provided by the insurer? Is it a basic defined events cover or a broad accidental damage cover?
- What is the occupancy of the premises? Sub-letting the premises, having boarders or non-family members, having unoccupied premises, providing a bed and breakfast service or renting out the premises can all affect an insurers decision as to whether they will insure you and on what terms. It’s important this information is disclosed correctly and kept up-to-date or you may be exposed in the event of a claim.
- What is the legal liability limit?
- Does the insurer provide a repair guarantee?
- Are there any other additional benefits provided by the insurer such as Tax Audits or Fraudulent Use of Credit Cards?
Building Sum Insured
How do you determine an adequate sum to insure?
Does your insurer pay for removal of debris, architect and engineer fees, council fees and accommodation costs within your specified sum insured or in addition to the sum insured?
How does this affect the sum insured?
Contents Sum Insured
Are your contents adequately insured?
Does the policy wording cover your contents even if you take them out of your home? To what extent? Are there any sub-limits?
Is jewellery covered, and to what extent? Is it sub-limited? Is it covered away from your home? Is it covered for accidental loss?
Is electrical motor burnout cover included? Do you have to contribute to the loss? Are there any restrictions on the age of the motor?
Are any of your contents kept in the open air, such as your yard or on your veranda? Are they covered? Are there any sub-limits?
How will the insurer settle your claims? Will they use their preferred suppliers to provide replacement items, or will they settle on your quotes and preferred suppliers?
How much cover is provided for spoilage of freezer or refrigerated foods?
Does the policy cover any of your antiques or collections (e.g. stamps, coins, memorabilia, guns, etc.) and to what extent?
- What items does your insurer require you to specify to be covered?
What items do you need to specify because you exceed the policy sub-limits for those items?