Thursday, September 4, 2014

5 things you need to know about contents insurance (Sponsored)

Recently I read some statistics on insurance in Australia and they scared me. Having been through a lot in my life, I make sure I am always adequately insured, but apparently I am in the minority. So here are 5 things you need to know about contents insurance, with the statistics provided by Understand Insurance.

1 - Renters need insurance

74% of renters are not insuring their home’s contents. This is 82% for people in a unit/apartment, 68% for people in a house.

In November 2012, I had left my husband and moved into a rental. The very first thing I did was get insurance to cover my contents. I had very little – half a lounge, a TV that had broken off the stand, which sat on an old chest, a bed each for my daughters and I, our clothes, some kitchen utensils, toiletries, linen, my jewellery and a sewing machine.  I had virtually nothing.

1 week after moving I was broken into and they took everything that was personally mine such as my clothes, shoes, jewellery, perfume, beauty products, make up, right down to my underwear. They broke in through the bathroom, went straight to my bedroom, cleaned it out and back out through the bathroom.

They stole over $20,000 worth of stuff from my bedroom and bathroom alone. I had insurance, so it wasn’t an issue cost wise, but have you truly looked at how much it would cost to replace everything you own?

Another example, I was 12, my parents were renting a house in Canberra while we waited for our house to sell in Tasmania. We went on holidays and while away our house burnt down. We had insurance so everything was replaced.

Everyone thinks it won’t happen to them but it does.

2 - List valuables separately

There are some items, which have higher than average value you might need to list separately, for example jewellery. Most insurers have a cap in the policy for how much you are covered with jewellery, unless you have individual items listed, valued and included with extra coverage.

If you have any items that are worth more than your policy covers, list them separately.

3 - Update your details when you make major purchases

53% of people with contents insurance do not update their policy when they purchase high value items!
What are we doing? Over half of the country don’t update their policy when they buy a new TV, lounge suite, computer or similar. Do you not want it to be covered?
Any time you make a large purchase, check your insurance to see if you need to update it, increase your cover or list an item separately.

4 - Review your policy annually

36% of people did not compare insurers before renewing their annual policy. Every time I get my insurance renewal notice I review my policy and also do a comparison with other insurers. Last time I did my contents policy the new quote I got online was better value than the renewal for exactly the same things. You should get quotes to compare different policies, but remember price is not the only thing to consider as it’s important to select your insurer based on the right coverage for your individual needs.

5 - You need to cover your standard of living

81% of homeowners / renters say they do not have enough insurance to resume the same standard of living in the event of a crisis. This might seem high, but look at so many natural disasters we have had in Australia and how many Australians didn’t have adequate insurance. Check your policy, see what you are covered for and make sure you will be able to resume your standard of living should anything happen.

In January 2003 I was a hairdresser in Canberra. That year we had a catastrophic bushfire which burnt over 70% of the land surrounding the city (the pastures, bushland and so on), 500 homes were destroyed and 4 people died. I was working next to one of the worst hit areas and many of our clients lost their homes. I was 17 at the time, living out of home and I was stunned at the amount of people who were underinsured. Many thought nothing would happen and while the events of that day are extremely rare, the fact is it can and did happen.  And in case you are wondering, yes, even with the tiny amount I owned, I had insurance at 17.

If something happened and you lost everything, are you adequately insured?

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