Monday, July 21, 2014

Things you might not know about Home and Contents Insurance

Buying a home is likely the largest purchase you're ever going to make, so you need to do everything possible to keep it safe and secure for the long haul.  That means buying the right kind of insurance to take care of it if something ever goes wrong!
Here are some important things you need to know about home and contents insurance:

Home and contents insurance usually go together, but they cover very different things
If you simply go out and buy home insurance, the structure of your home itself will be covered if it burns down, gets damaged from an earthquake, or gets vandalised.  However, in order to insure all of the belongings you have inside your home -- like your furniture, your clothing, and your electronics -- you have to get contents insurance. 
Luckily, most Australian insurance companies offer home and contents insurance together.  That way, you can get all of the coverage you need in one place.

Policies differ wildly when it comes to limits
In most cases, contents insurance comes with per-item limits -- meaning that each particular item in your home is only insured for a certain amount.  Let's say that limit is $5,000.  As a result, if you have a piece of jewelry stolen that's worth $10,000, you'll only get $5,000 from your insurance company for it.
That's why it's so important to read the fine print and check out the limits before you sign on the dotted line!  If you don't, you could actually wind up losing money if something ever goes wrong.

Flood coverage can get tricky
Once you've got your home and contents insurance policy all picked out, you might be inclined to think that everything is taken care of, and your work is done. Unfortunately, though, that may not be the case!
As a general rule, home and contents insurance policies don't only differ from state to state, they tend to be restrictive when it comes to flood coverage as well. Just because your policy comes with flood coverage doesn't necessarily mean the coverage is enough. Learn exactly how your policy works when it comes to floods. You may need to go out and buy separate flood insurance if you live in an area that's prone to flooding.

You may need to bring business into the mix
If you work from home -- and you have a particular room or area in your home that's a designated work space -- you'll need to get a separate business insurance policy.  Home offices are excluded in virtually all home and contents insurance policies, meaning that if you don't have a business policy, you'll be stuck paying for damages to your home office out of your own pocket!

Termites can really "bug" you -- literally!
Most Australian home insurance policies won't pay for damage that's caused by termites.  That's because they consider termites to be something that you can prevent during routine upkeep of your home.  Because they're considered preventable, anything that termites do to your home won't be covered, so be sure to make pest control part of your routine!

What are your thoughts on home and contents insurance?

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