It’s a horrible feeling to arrive home or to your business to find that it has been burgled or there has been loss or damage to property. What’s even worse is the realisation that your current insurance doesn’t cover you for all the resulting expense.
So how can you make sure that you have adequate insurance cover?
Underinsured - what does this mean?
If unforeseen damage or loss occurs to your home or business, having comprehensive insurance cover is essential to ensure that you receive the required financial support.
If your home or business is not adequately covered by insurance for damage or loss, it can lead to difficulties financially as your claim may be more than the maximum sum than the insurance company will pay out.
So why do some properties have inadequate insurance cover?
When you are setting up policies with an insurance company, you will be required to outline the value of the home or business and its contents. Often this is underestimated, and the knock-on effect is that the insurance may not be adequate to cover a claim.
What happens if my home or business doesn't have enough insurance cover?
The danger is that if your property isn't sufficiently covered by insurance, you could be out of pocket for a lot of money at a time when you can least afford it.
If you have to make a claim after damage or loss to your home or business, the likelihood is that the insurance payout won't be enough to repair damages and replace contents. There is also a risk that the insurance company may only pay out for part of the loss - for example, consider a scenario where your property would cost $600,000 to rebuild, but you have only insured it for $300,000. If it is then completely destroyed by a fire, the insurance provider could have the right to make a reduced payout that is in proportion to the underinsurance. So, if you are underinsured by 50%, the insurance payout could be as low as $150,000, a lot less than you need to rebuild.
How can I work out if my property is underinsured?
The key to ensuring that your property is adequately covered by insurance is knowing the accurate value of the building and belongings. Talking to an experienced builder will give you a good guide to the cost of rebuilding.
Preston Finance & Insurance can help you through the process of making sure that your home or property is valued and has the correct insurance cover. This can be an arduous and time-consuming task, but it's something that we are used to doing every day.
It is also important to evaluate your insurance often. Prices rise and insurance policies must reflect this. Ten-year-old policies probably won't be suitable for the same properties and belongings today.
If you are unsure about property insurance policies and whether your home or business is sufficiently covered, let Preston Finance & Insurance help you. We can guide you through the complicated areas of insurance in Australia and find a great policy for your requirements at the right price.
This above information is not comprehensive. It provides only a summary of the subject matter covered and is not tailored specifically to your business or private situation. You should make your own assessment of this information and rely on it wholly at your own risk.