- You get what you pay for
For Insurance Brokers, we know that many Businesses choose not to insure their risks only really taking cover when they have taken out a loan, renting property or contracting to another party.
While most recognise the need to protect their business assets against Fire, Storms and liability claims and many other risks, you would be surprised to know that many people also do not insure their own homes. Even though their mortgage demands they insure the property, many will the first year but many Banks do not continue to check after that.
Those that do insure, often choose the cheapest cover they can find. A house is the biggest asset most people have. The equity provides security for other loans. It is part of an owner's accumulated wealth.
Unfortunately people treat Home insurance like buying groceries. All policies are not the same, all policies do not cover the same things. The policy an Insurance Broker will arrange will offer better cover. The broker will also provide professional advice and will help you with any claims making sure you obtain your full entitlement. Why would you skimp on protecting your biggest asset?
On building insurance, this can be by not insuring for the full replacement value. Not taking into account that the claim you make could be in 12 months time, that you will have to clear your block of the rubble left following a fire. The fact that you will have to engage Architects, Surveyors and Engineers to come up with a suitable design for your building that will be approved by council. Having to re-lodge your building application with amendments if not approved. Then find a builder and if during a peak boom period, pay more for Labour and materials. Then while you are waiting on this, you need to rent and live somewhere else. This also can be provided for in your policy. We do like the insurers who give guaranteed replacement cover using their own calculation of your sum insured so you can never be under insured.
There are two main types of cover. What we call "defined events" cover which lists the particular risks you are covered for. The other is "Accidental Damage" cover which is much broader and picks up those events that are clearly accidental but not listed as covered or excluded.
Accidental Damage cover is particularly good for Contents insurance. But this is also where there is so much difference between insurers as it is the area that is claimed on the most. With Burglaries, for instance, Jewellery, which most people have, insurers will limit claims for any one item between sometimes $1,000 per item often up to a total of $5,000 of all items. Some may say 20% of the total contents insured as a maximum. Depending on the insurer concerned. Many will allow you to specify items that are worth more, but many people do not. Valuations are needed to prove the value of items to be specified. The prestige covers will have limits on Jewellery of up to $25,000 per item and $50,000 in total.
Then there are your Works of Art or paintings. These too also vary. Some insurers limit these to only $2,000 with other insurers agreeing to much higher sub-limits of $15,000 to $50,000.
Other covers that can be included with some insurers but with others do not cover include Landscaping Rectification, Home Office/Surgery, Funeral Expenses, Office Bearer's legal expenses, storm surge, Credit Card fraud, Fusion, Emergency clothing, Tree Removal, Mould Rectification. Pet Accident cover, Arson Rewards and mortgage discharge costs. All minor but useful if you are unfortunate to have a claim.
So go for quality cover, not cheap prices. Your House and Contents are likely your most valuable assets. It is worth covering them as best you can because claims happen.
And remember, Call Centres and online insurers do not give you personal advice or compare different insurers. Only an Insurance Broker will act in your best interests to do so.