Home Insurance
Why do we need home insurance? What types of insurance we need for our home? And how do we ensure we are not under insured?
Home insurance is not just an insurance that you just need to buy and renew every year, you should know exactly what your policy is about. In addition, home insurance is different from contents insurance, this is a common mistake made by consumers when selecting their insurance. We compare home and contents insurance using our home and contents insurance comparison tables to help you find the best deal on either combined home and contents insurance or just home insurance or just contents insurance.
Home and Contents Insurance
A home and contents insurance is a policy that covers your home and contents, which essentially means, your house and its contents. But there are many factors need to be considered when taking up a home insurance.
What is a house? In insurance terms, your house is different from what you think. Carpet may not be considered as part of the house, curtains are not considered as part of the house. Generally speaking, it applies to all the items that are permanently fixed to a house, such as walls, timbers, or bath-tub. But it becomes very tricky for items like stoves, oven, as they could be defined as contents rather than house.
This is an important question you should assess before you take up your home insurance.
What are covered? Home insurance are taken up to provide protection under 2 circumstances: Where the house is totally destroyed by fire or other accidents, then insurance companies will pay for the rebuild cost based on the insured amount on the policy or lower.
The 2nd scenario is where the property is partially damaged, the most common insurance claims relate to damage caused by falling trees, damage to roof and house from heavy rains or floods or hailstorm.
Exclusions on Home Insurance: Insurance companies will assess each claim against its exclusion policy wordings. Common exclusions found on home insurance policies include:
- The damaged areas are defined outside the policy
- The damaged area is caused by lack of maintenance or repair and is not caused by the event
- Specific exclusions on insurance, such as fire exclusion on home insurances in ACT and NSW during bush fire seasons or flooding in QLD
- Where the damage has been caused by the occupants
Home Insurance for Investment Properties?
This is a common question asked by property investors; do they need a home insurance for their investment properties? Most property agents would recommend you take up landlord protection insurance instead, as that will cover for damages caused by the tenants.
Home and contents insurance are also sometimes purchased by property investors to ensure – it is best to check to what extent the landlord insurance is already covered to avoid double up.
Important Factors to Consider on Home Insurance
Cost to rebuild your house: Generally speaking, insurance premium will be adjusted each year by inflation / CPI to reflect on the increase of your house. It is important to have a realistic view about value of your house, and not to base on how much you can save on insurance premium.
This is a classical example of under-insured, where you will find yourself paying a lot of expenses out of own pocket in the case of major damage.
Remember to Renew Insurance: One of a property in our suburb was destroyed by a fire during renovation recently. The family forgot to renew the insurance they have bought, the insurance policy lapsed 2 days before the tragedy. Never let your house go uninsured even for a day or two, as that is what exactly insurance is used for.
Notify Insurance Companies when you make renovations: If you add renovations, you should always notify your insurance company and make adjustments for it, as the original insurance policy was only covered for what the property was like at the time insurance was taken up.
Home Contents Insurance
Home Contents Insurance usually comes with home insurance as part of the package. Home contents insurance in essence, covers items that fall outside your home insurance, such as electronics, furniture even curtains, carpet, light fittings.
Special conditions are imposed for expensive items such as jewelry pieces or collections such as art collections or music instruments, they are usually not included in the standard contents insurance, or you need to pay additional premium on them.
Contents insurance covers your movable items such as laptops, but insurance companies are usually only required to pay for the claim if it is stolen while in the house.
Adjusting Your Contents Insurance Policy
Contents Insurance also need regular updates, you should always have files available or photos to provide evidence in case of a theft or break-in to prove that you own the items described on the insurance policy.
If you make improvements to security, that will lower the insurance policy. You should notify insurance company when you make changes such as double locks, new security alarms, or new gates or window grills.
It is also your duty if you purchase new items or replace items, they should also be added to your contents insurance policy, or they will not be covered by the original insurance.
Again, shop around your home and contents insurance, there are frequent special deals available from insurance companies, many also encourage you to apply these insurance policies online to keep an electronic record of inventory at the same time.
