With the height of summer upon us and the usual spate of seasonal bushfires and cyclones just around the corner, it’s timely to consider your home and contents insurance. The Fire and Emergency Services Authority of Western Australia (FESA) encourages home owners to make sure they are properly insured.
It’s tragic but not uncommon to learn that some people who experience the loss of a home from fire or have it severely damaged by a storm, later admit they had simply neglected the insurance.
The family home is not just a necessity it is also the first step towards long term financial security. Losing your home can be a body blow to your finances. Having to start again from scratch can be devastating. It is simply not worth the risk to ignore adequate insurance and there are plenty of products on the market to meet your needs.
Insurance premiums have risen in recent years and this can impact on tight family budgets, however the risk of being uninsured is a far greater burden. Switching to regular monthly payments which combine both building and contents insurance can help bring down costs.
It’s not so much a lack of insurance which catches most people out, but the mistake of underinsuring and not being able to recover financially after a disaster.
Building costs have risen significantly over the last few years, meaning that many people have underestimated the amount of insurance required if rebuilding is necessary. Sometimes inappropriate insurance rather than inadequate insurance can be a problem for people, and after reviewing their needs some households are shifting from comprehensive to disaster cover.
These homeowners are prepared to pay a higher excess for claims as a trade off for low premiums. Effectively, this means the household is prepared to meet the expenses of relatively minor damage to their home and the insurance policy is directed to covering major damage.
This approach would not suit all households but can be an affordable alternative that results from a review of the household’s insurance needs. An insurance review should consider the required level of cover and the policy holder’s capacity the afford the premiums.
Most households underestimate the value of their possessions and lack adequate contents insurance. So, once a year it’s a good idea to walk around inside your house and make a general note of its contents and what it might cost to replace them at current prices, including all your clothing, furnishings, white goods, appliances, air conditioners and computers.
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