The true cost of under-insuring your home this summer
After the year we've all had in and out of lockdowns, it's understandable that we're bursting at the seams for a well-deserved summer holiday. But before you hit the road, it's important to consider whether your vacant home will be safe and secure while you're away.
It's one of the more mundane tasks on your vacation to-do list but checking you have adequate home and contents insurance could end up saving you thousands of dollars in the event of theft, storms, flood or fire.
Home and contents insurance 101
You may be surprised to know that 36% of Aussies surveyed do not have home or contents insurance, according to a new study by comparison service iSelect. That's a lot of people risking being left thousands of dollars out-of-pocket for any potential theft or damage to their property, and belongings.
So, what is home and contents insurance and what exactly does it cover?
Home and contents insurance is a combined policy, with home insurance helping cover the cost to repair damage to your home after an insured event, and contents insurance providing cover for certain possessions, including clothes, furniture, and appliances.
Depending on your policy, home and contents Insurance may help to cover the repair or rebuild of your home, as well as the replacement costs of insured possessions.
Types of home and contents insurance
Besides home and contents policies, landlord insurance is also available. Landlord insurance is designed for homeowners renting out their property to tenants. A typical policy could cover you for damage from storms, fire, lighting, theft or malicious damage.
If you're renting, it's unlikely you'll need to insure the property yourself, it is worth considering insuring your possessions with Contents Insurance. This insurance can help cover the repair or replacement cost of certain valuables if they're damaged, or stolen.
Don't get caught under-insured.
So, you already have home and contents insurance? That's fantastic, however, it's important to consider reviewing your insurance every few years or as the value of your home and contents change. For example, during lockdown a lot of us splashed out on upgrading our homes with new entertainment systems or a fancy new piece of artwork.
If you live in a bushfire zone, you're probably all too familiar with securing your home with a bushfire plan. However, iSelect's recent research also found that one in five respondents who live or own property in a high-risk bushfire zone do not have their home and contents covered in the event of a bushfire.
Mother of five Destani Davies can tell you first-hand the regret she felt after failing to adequately insure the contents in her rental property when faulty wiring caused a fire while she wasn't home.
Thankfully, no one was hurt but Destani belongings were destroyed.
"I lost approximately over $7000 worth of my belongings because living in a rental property, I didn't even think to insure my contents at the time."
Destani now has home and contents insurance on her current property which has served her well when her home was later burgled.
"While it was traumatic to have our home broken into, we at least had the peace of mind that we were covered for our home and belongings this time around."
The last thing you'd want is to end up with high out-of-pocket costs at claim time because you weren't covered for the true value of your home and contents.
So, if it's been a few years, now could be the perfect time to review your home and contents insurance policy to ensure you're covered before hitting the road or the skies this summer.
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