Contents insurance is available to both homeowners and renters and is an important investment that will allow for the replacement or repair of your possessions if they are lost, damaged or stolen.
What items are covered?
Depending on the insurance policy you choose, all, some or just one of your household items may be covered. If you cannot afford to pay insurance premiums on all of your belongings, you may choose to cover the most valuable, or the item/s that you could not live without and may not be able to afford to replace quickly (such as a laptop or fridge).
Not all policies are alike and while some may cover any loss, damage or theft, others may only apply to a certain event, such as a burglary.
Your policy will provide for either a replacement of the item/s or payment for the value of that item. For this reason, it is important that particularly precious or expensive items are insured at their true value.
If you are renting, it is important to know that your landlord’s insurance does not extend to cover your personal belongings.
I don’t think I can afford contents insurance. Do I really need it?
The question you need to ask yourself is, “can I afford not to have contents insurance?”. If your livelihood depends on your ownership of certain items (for example, if you are a musician and your instruments are damaged or stolen) and you are not able to replace or repair them without an income, the detrimental effect could be compounded. Having contents insurance, however, can help you get back on your feet and is an expense to consider no matter what you earn. There are different options available for all incomes.
It is wise to consider a range of different policies to ensure you are choosing the one that suits your lifestyle and financial needs and also your location. In Far North Queensland it is imperative that your contents insurance covers the repair or replacement of items that may be damaged or lost in flooding or cyclones if the area where your home is located is likely to be affected.
When will my claim be paid out?
If you have experienced an event that is covered by your policy and one or more of your items has been stolen, lost, or damaged, contact your insurer as soon as you can. If a police report was taken, be sure to have a copy on hand when you make your claim, as well as any other evidence that supports your case.
Depending on the details of your claim, the supporting documents and the policy you are covered by, the timing of the payout may vary. The insurer may also offer to fulfil the payout of the claim in a range of ways, including:
- offering to pay for the cost of repairing the item (if damaged);
- offering you a cash settlement;
- offering you a gift card for the value of the goods; or
- replacing the goods.
I don’t want to insure all of my belongings. How can I choose what to have covered?
Walk through each room of your house and take note of the items you couldn’t afford to live without. Take photos of them as you go. Make sure the photos are clear and detailed to give an indication of the quality and condition of the item at the time the photo was taken. Remember to include household goods such as carpets, which people often forget to insure and are expensive to replace.
Make a spreadsheet (or a simple list, even if it is handwritten) of all of the items, with a separate column with the price of how much it would cost to replace the item.
If you are insuring jewellery or other valuable items, you should go as far as having a professional valuation conducted to ascertain the true value of each item.
Keep the photos and valuations in a safe, but easy to retrieve, place in case you need to make a claim in the future.
Crime rates in Queensland rose by 2% for the 2018-2019 year and among the top ten items stolen from burgled homes were laptops, jewellery and watches, phones, cameras, wallets/handbags, televisions and gaming consoles.
If you cannot afford to be without these items, you should speak to your insurance provider about taking out a home contents policy to protect your belongings.
If you would like to review your current policy or get a quote for a new policy, get in touch with the team at Preston Finance and Insurance today.