Protecting your home. What to look for when comparing policies

It’s tempting to put price above everything else when choosing insurance for your property. However, whether you’ve just taken out a new mortgage or are hunting for a better deal, making sure you have enough of the right sort of cover is just as important. Here are the main insurance points to consider when comparing home and contents insurance policies.

Protecting your home. What to look for when comparing policies

Covering your home

Home insurance covers the replacement of your home building and permanent fixtures like plumbing and built-in cabinetry. The most common type is ‘sum-insured’, which will cover an amount that is specified by you when you take out the policy, should you need to repair or rebuild. Some insurers offer ‘total replacement’ cover, which covers the cost to repair or rebuild and replace anything destroyed by the event to the same standard but this is usually much more expensive and so not as popular.

Either way, to avoid being underinsured, you need to work out an accurate rebuild cost. You’ll also need to decide if you want to include extras like accommodation during rebuilding and removing debris from the site.

Most insurers have calculators on their websites. Try to find one based on ‘elemental estimating’. It collects a lot more detail about your home’s construction and location, making it more accurate than the rougher cost-per-square-metre estimates.

It’s often worthwhile checking if an insurer offers an underinsurance buffer. This is when they add up to 30% to your sum-insured amount if your property is a total loss.

Checking exclusions is vitally important, as all household insurance is based around carefully defined events. That means you need to check that a quote’s definitions, especially natural events like ‘flood’ and ‘fire’, work for your location and likely risks.

Calculating contents insurance

Most contents insurance offers the replacement value of your belongings, or ‘new for old’ cover but it is possible to find fixed value, or sum-insured policies.

With contents insurance, you need to decide what to include in your cover. You’ll also need to check if an insurer repairs or replaces the damaged items or pays you the amount it would cost to repair or replace them.

To calculate the value of your insurance, you’ll need to make a list of the belongings you want to insure and include how much the items would cost to replace today. You may need to add portable technology like tablets and laptops, specialist items like artwork or things valued above the payout limit, like a large TV, bikes or jewellery, under Extras. Accidental Damage, such as a broken vase or stained carpet, is often included as an optional extra here too.

Keeping serial numbers, purchase receipts and photos of items can help with cost assessment if you need to claim. You can find user-friendly calculators on most content insurance websites. Again, check the definition of the events covered by a policy to make sure it meets your needs and to avoid any unpleasant surprises, in the event you need to make claim.

Landlord insurance

Landlord insurance is available for long- and short-term tenancy rentals and can include building, contents, and rental income cover.

Choosing the best quote for you

Try to compare at least three quotes for each type of insurance. They will have Key Fact Sheets and Product Disclosure Statements (PDS) available online.

The main features to compare for any home insurance are;

  • premium costs,

  • event definitions,

  • exclusions,

  • extras,

  • excess amounts and variations, and

  • cover limits.

Also check for discounts on bundling policies, buying online and any safety measures you have adopted. Some may include additional services like replacing locks after a burglary. And while comparison websites can be useful, please remember that they may promote only paying businesses and will not show your full range of options.

While it’s not something we like to think about, minor mishaps and unexpected disasters can arise, so taking your time to select the most appropriate cover for your circumstances can prove valuable in the unfortunate event you need to make a claim.

Talk to us on 03 9553 0271 or an insurance broker if you need help.

Important note: This provides general information and hasn’t taken your circumstances into account.  It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.  Past performance is not a reliable guide to future returns. Important Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.

 

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CFP® Dip FP
Authorised Representative 298494
Interprac Financial Planning Pty Ltd 

Darryl Jopling

Senior Adviser

I have worked in the financial services industry since 1982 and as a Financial Adviser since 1999.

I have worked for large Financial Planning businesses, Membership based organisations and looked after the financial planning needs of clients within an Accounting Practice before starting my own business.

I am married, have 4 older children and a grandson and I am keen golfer with mixed results like many .

I have been through many of the strategies I talk with clients about myself and with my family.

I have been through the journey of seeing my parents move into Aged care and negotiated the difficulties and pitfalls of understanding the system for them and this gives me an excellent insight into what is required to assist families at this difficult time.

In a previous roll I used to run retirement seminars looking at Centrelink and Retirement Incomes and how to make these work for you. I have helped many of my clients with Aged Care advice when their parents needed to move into Nursing Homes. For many clients I assist them with superannuation, building wealth and protecting their loved ones with insurance.

I am supported by his, Licensee, Interprac Financial Planning’s in-house resources and ongoing technical, systems and training.

I am committed to understanding your needs and identifying strategies and products to help you achieve your goals.

My guiding principle as an Adviser is to design plans which help to provide my clients with clarity of purpose and the opportunity to build a solid financial foundation.
I will take the time to listen, explain things clearly and keep you informed throughout the advice process.

My experience is complemented by professional qualifications including:

  • Certified Financial PlannerTM Professional
  • Diploma of Financial Planning

At Choice Financial Advice we work with you along the way on life’s journey.

Whether you are getting married, starting a family, embarking on the trip of a lifetime, planning to enjoy your years after work or assisting elderly parents with Aged Care and Nursing Home placements, we can help.